After 20 years in the medical device business, you might think Smith & Nephew Endoscopy president Mike Frazzette had grown jaded. But the industry innovations, ranging from the mechanical tissue shaver that started it all for Smith & Nephew Endoscopy to current work with bioabsorbable materials, continue to amaze and engage him.
MassDevice asked Frazzette about how his endoscopy business has evolved and the way Smith & Nephew leverages its developing technologies in adjacent business segments.
MassDevice: How did you get your start in medical devices?
Mike Frazzette: I joined Smith & Nephew Endoscopy three years ago, with more than 20 years experience in the medical marketplace. Before I became president at Smith & Nephew, I was CEO of a private equity-held medical device manufacturing company. I also spent 16 years with Tyco. At Tyco [now Covidien], I worked my way up through sales, marketing and general management positions.
MassDevice: Why did you get involved with medical devices? What made it a good fit for you?
MF: I went into a healthcare sales career right out of college. My background is in science; I have a degree in chemistry. However, my personality is more suited to the customer side of the business. I’ve always enjoyed sales and marketing. I’m fortunate that I’ve been able to build a career that draws upon my strengths in all of these areas.
MassDevice: Can you give us a quick overview of what the Endoscopy unit does? Can you talk a little about the BioSkills Lab too?
MF: Smith & Nephew Endoscopy specializes in medical video and arthroscopy, minimally invasive surgery of the joint. We develop, manufacture and market the devices that surgeons use to access the joint, visualize the pathology, resect — or remove — damaged tissue and repair the injury. Minimally invasive surgery can result in less trauma to the body, shorter recovery times and often less cost to the patient.
What’s interesting is that it was design engineers, working for a small Massachusetts company called Dyonics, who developed a mechanical shaver that could be used arthroscopically to remove damaged soft tissue in a knee joint. Their invention changed orthopedics forever, because it gave surgeons an alternative to open surgery for repairing joint injuries. Dyonics later became the core of Smith & Nephew’s Endoscopy business.
Since then, the specialty has evolved. Surgeons now use arthroscopic techniques in the knee, shoulder, hip and small joints. The materials we use have changed, too. The first anchors and implants, which are used to re-attach soft tissue to bone, were metal. Now we’re also using bioabsorbable materials, and are working toward biologics — materials that help the body heal.
We’ve also found ways to leverage our technologies in adjacent areas. For example, we have adapted our resection technology so it can be used to remove polyps and fibroids in gynecology procedures.
We maintain BioSkills lab facilities in Andover and Mansfield, Mass., where visiting surgeons can improve their arthroscopy skills, learn new techniques and try out devices that we’re developing in a surgery-like setting.
The labs are a critical resource for us as a business, because we use them for product development and education. Often, while a surgeon is on-site, we will demonstrate a product under development, let the surgeon try it and get his opinions about it. The feedback we collect from surgeons in our BioSkills lab setting is invaluable in helping us remain responsive and innovative.
MassDevice: How do you differentiate the endoscopy segment from competitors?
MF: We pride ourselves on our commitment to customers and the way that translates into innovative solutions for surgeons worldwide.
On a global basis, we are intensely focused on the needs of our customers and we use that customer connection to drive innovation for the business.
One example is our InVentures program. As surgeons become more proficient in arthroscopy, they have their own ideas about what types of devices can improve their patient outcomes. The InVentures program provides a framework for them to bring their entrepreneurial ideas to us.
In response, a team of engineers can design and build a prototype device to the surgeons’ specifications — often within 24 hours — so the surgeon can try it in a surgery-like setting.
MassDevice: What’s on the horizon for your unit?
MF: As an industry, orthopedic sports medicine is moving from technology that has existed for decades — the screws, anchors and sutures — to technology that incorporates bioactive materials.
For example, the first interference screws, which are used in many procedures, including ACL reconstruction, were made of metal. Then we began making them from polymers, and then polymers that were bioabsorbable.
The next step is to make these devices from biomaterials that help the body heal.
MassDevice: What’s the biggest leadership lesson you’ve learned, and where did you learn it?
MF: One lesson is to stay focused on customers — finding them, retaining them, delighting them and responding to their needs.
Another important lesson is to stay focused on your core business — what you are best at, what you can do unlike anyone else — and do business in a world-class manner. That’s what drives your business.
As much as there’s a temptation to divert to other areas outside your core business, it’s most important to stay focused on your core.
MassDevice: What strategies and tactics have you adopted to deal with the economic downturn, and what’s your forecast for short- and long-term prospects?
MF: Again, the important thing is to stay focused on the customer and find new ways to delight them. Customers have choices, and in an economic downturn they may start to look elsewhere if we’re not paying attention.
In the short term, I don’t see conditions much different from what they are now. Business will continue to be sluggish in the capital equipment markets. The number of elective surgical procedures will continue to slow down as people’s economic situations put pressure on their decisions.
In the long term, I believe that as the economy improves we’ll see a rebound. People in general, worldwide, want to be healthy and want to stay active. We’re in a good demographic because our customers are focused on active, informed patients.
MassDevice: What effects has the recession had on your business?
MF: We’re not immune to the downturn in elective procedures. Clearly the financial crisis worldwide is having an impact on hospitals’ ability to purchase capital equipment. Capital equipment comprises about 25 percent of our overall business, so tight credit markets stemming from the slowed economy have had an impact on us.
MassDevice: We’re in a period of great flux in the medical industry. What do you think the medical device business will look like in 20 years?
MF: The medical device business will always be closely aligned with healthcare practitioners and providers. I don’t think it will look that different from how it looks today, especially the relationships between surgeons, or healthcare providers, and the medical device industry. Our role will always be to enable them to provide better outcomes for their patients.
MassDevice: What changes have you seen in the industry over the years?
MF: The biggest has been in areas around compliance. A bright light shines on the relationship between healthcare providers and medical device companies.
Recognizing that that is the case, we have to be cognizant of the fact that while the vast majority of those relationships are ethical and honorable and appropriate, there are situations that can lend themselves to lapses in ethics.
We put a great deal of emphasis on compliance and ethics. We have a global code of conduct and business principles, and everyone in the organization must abide by it. We have a dedicated compliance staff charged with reviewing all of our interactions with healthcare providers, government officials and third-party vendors.
Smith & Nephew has always taken compliance very seriously. Our success is directly tied to our reputation. Now we’ve raised the bar, and want Smith & Nephew to represent the industry standard for ethics and integrity.
MassDevice: What’s the biggest challenge confronting the device industry and how should it respond?
MF: As we move to bioactive and then biologic materials in our products, there is more pressure put on device companies and the industry as a whole to provide clinical evidence of effectiveness. I believe the device industry has to step up to that challenge. It’s not something a third party can provide. It’s up to the companies in the industry to respond, because they know their technology better than anyone else.
In order for us to successfully provide innovative technology, we have to demonstrate that it works. We’ll use different measurements than we do now. Today, we might talk about the strength of the repair. In the future, we’ll talk about how quickly the injury healed.
MassDevice: How about the future of selling medical devices, which is still very reliant on visiting doctors? Do you see this changing as rules become stricter? Are there other moves afoot the industry should be concerned about?
MF: That depends on the ability of a company like Smith & Nephew to educate its customers on techniques and technology we’re promoting. We’ll always be relying on the clinical sales rep in the field to support surgery.
The rules may change over time, but the fundamental relationship between clinical sales reps and healthcare practitioners will not.
The value a clinically trained salesperson brings to a healthcare practitioner is in the knowledge he can share, not freebies or gifts like tickets to a football game.
We’re always challenged in creating networking opportunities. As an industry, we have to work our way through that in a responsible, ethical manner.
MassDevice: How is training a sales force different today compared to 10 years ago?
MF: As our portfolio gets more technical and clinical, it’s tougher to execute on yesterday’s “big bag” distribution mentality. Today’s sales force must be clinically trained and be able to demonstrate and promote a product on evidence-based proof that it is effective.
As our portfolio evolves, we want to continue to stay at the forefront of technology. We’re not a big catalog company selling commodity medical devices with a generalist approach. That’s not how we’re going to drive our company’s growth.
MassDevice: When you’re building a team today, what areas do you put the most energy into: R&D, regulatory, sales and marketing, operations?
MF: It’s all about customer intensity. There are several things we have to be very good at as a company. First, we need to be rationalizing all ideas that come our way to determine what our company is going to look like — what types of technology are we going to pursue? Then we have to be good at sales and marketing. Our focus has got to be on world-class business development, marketing and sales.
MassDevice: Where do you see the next innovation coming from in the medical device industry?
MF: The next innovations will be in materials. We’ve already seen movement from metal to plastics and bioactive materials, such as the bioabsorbable anchors and screws. Next come biologics — the materials that enhance the body’s ability to heal. We’re already seeing it in products that combine the benefits of drugs with design — drug-coated stents, for example. In our industry it might be a knee screw that promotes bone growth.
As I said earlier, rather than talking about pull-out strength and suture strength, we’ll talk about speed and quality of healing so that people can get back their lives. Ultimately, innovation in healthcare is always about improving lives.