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Home » What’s on the minds of medical device executives for 2010?

What’s on the minds of medical device executives for 2010?

January 7, 2010 By MassDevice Contributors Network

by Lloyd Benson

Shortly before Christmas, our agency published a special report, Healthcare Predictions 2010.” In putting it together, we asked for insights, predictions and hot-button issues for 2010 that are keeping executives from industry, investment bankers, venture capitalists, analysts and informed industry observers awake nights as we enter the New Year.

It was striking, but not overly surprising, that the concerns we are all thinking about these days are so consistent thematically. And, again to nobody’s surprise, the New Year begins with all eyes turned to our nation’s capital, where issues regarding the final version of healthcare reform and changes at the Food & Drug Administration are coalescing to create an atmosphere of concern and uncertainty.

It’s hard to know what the final form of healthcare reform will look like, but virtually all executives agree that it will contain a significant tax on device makers, with estimates ranging between $15 billion and $20 billion over a range of years. The anticipated impact is sure to be adverse for some in the industry, moving some companies from the black to the red — and some out of business entirely.

The upside of healthcare reform for device makers is not nearly as well-discussed or monitored, however. No doubt there will be a huge influx of newly insured Americans (perhaps between 40 and 50 million) who will create a significantly higher demand for products. Whether this demand will be sufficient to offset the lowered prices created by the tax remains to be seen. But make no mistake, it is on all of our minds.

A fair amount of our sleepless nights are being spent fretting over changes at the FDA. Most executives predict a slow but inexorable march toward a regulatory environment for device makers that is far closer to that of the pharmaceutical industry than what device makers have been traditionally used to. New commissioner Margaret Hamburg has promised a significant review of the 510(k) process and the Center for Devices and Radiological Health is going to get a thorough and complete exam from FDA. This, coupled with an independent exam by the National Institute of Medicine, seem to forebode even slower approval times that the tortoise-like approach that’s marked recent years — which has lengthened each and every year since 2005.

The overall agency attitude toward both drugs and devices seems on the verge of severely tilting toward the safety side of the safety/enhanced efficacy end of the spectrum; this means that the onus is on device makers to prove that not only are their products safe, but that they have a real and measurable impact on patient care and outcomes.

Another area that device marketers especially seem to have on their minds as 2010 begins are the murky waters that marketing initiatives involving new, emerging “social media” channels are swimming in. The ability of device marketers to have at their disposal the highly personalized marketing tools that social media offer seems to be replete with promise, but there is one gigantic rub. Over the past year, industry has been urging the FDA to take a comprehensive look at what regulations may apply to social media marketing, in the context of how they regulate all forms of industry communications. The FDA essentially sat on its hands until last November, when it conducted two days of public hearings on the issue. It’s unlikely that we will see any formal guidelines from the FDA until late 2010, if at all this year; in the meantime, device company marketers will keep dipping their toes into the social media waters without putting the full resources of this potentially powerful arsenal to work. Look for the FDA to drop warning letters like National Football League penalty flags on companies that take flagrant advantage of the current lack of guidelines.

Of all the things that seem to worry the device industry most, however, it’s still the state of the macro-economy that tops the list — over and above industry-related issues. The Fed is now considering raising interest rates and the crunch on raising capital does not look to get much easier in the year ahead. If 2009 was a year of challenges in the medical device sector, expect more of the same in 2010.

Lloyd BensonLloyd Benson, executive vice president at Schwartz Communications Inc., has a long and distinguished career in public relations and strategic marketing and has been a key member of the Schwartz Communications senior management team since 1995. Benson currently oversees the agency’s award-winning healthcare practice. He can be reached at [email protected].

Filed Under: Business/Financial News Tagged With: Schwartz Communications

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