Innovation Inroads

It starts with an idea—a flash of inspiration, a “Eureka!” moment, often at a patient’s bedside or in the laboratory. That’s the easy part.

“The innovator must then create excitement about the idea, find funding for the prototype and testing, get it through the FDA and find somebody to license it,” said Wael Barsoum, M.D., an orthopedic surgeon at the Cleveland Clinic in Cleveland, Ohio. “Commercializing an innovation is not an easy process.”

Navigating a new product through approval and commercialization has never been more challenging. U.S. Food and Drug Administration (FDA) requirements are increasingly stringent. There is the giant weight of the medical device tax. Healthcare reform is putting extreme pressure on health systems to improve patient outcomes and decrease costs. As a result, innovation is not being driven so much today by grand new ideas, but by trying to find ways to make something cheaper.

“Medical device innovation is fundamentally challenging,” said Tiffany Wilson Karp, the general manager and chief operating officer for the Global Center for Medical Innovation (GCMI), an Atlanta, Ga.-based non-profit organization that works to commercialize innovative medical technology. “Today it is a multidisciplinary process that requires careful orchestration of academic researchers, clinicians, investors, entrepreneurs, lawyers, customers and government.”

These challenges aren’t necessarily a bad thing, noted Russell Kroll, a partner with Formation Design Group, an Atlanta-based product development firm.

“There’s no doubt that product cycles are becoming shorter and expectations are increasing,” he said. “However, we’ve never had the tools and capabilities for innovation that we have today. Concurrent developments in rapid prototyping, modular electronics and inexpensive software tools afford endless possibilities, even for limited budgets.” Challenging market conditions also create opportunities for disruptive innovation.

“New products will need to address the new market which focuses on value,” added Steve Fening, director of orthopedic devices for the Austen BioInnovation Institute (ABIA) at the University of Akron in Ohio. “At ABIA, we use the criteria for value-driven engineering to drive concept screening and device design. These criteria include reduced cost to the healthcare system for the treatment of a disease, increased clinical utility and reduced complexity in the use of the device to the end user. Value is increased by optimizing these three factors.”

Letting Innovation Flow
The key to great innovation is being part of an enthusiastic partnership that is committed to the same ideals and values and has the connections to support all phases of development.

“It is very important for the group to be devoted to the ethic of truly wanting to help patients improve their lives,” said Barsoum, who conducts robotics research to re-create joint kinematics for hip and knee implant design at Cleveland Clinic’s Orthopedic and Rheumatologic Research Center.

Identifying clinical needs is an effective way to jump-start innovation in a particular field or sector. Interaction with surgeons, clinicians, engineers and other subject matter experts is essential for developing the most effective, high-impact products.It’s also important to collaborate with outside clinical consultants to drive medical education and ensure proper product use. Conferring with engineers and clinicians is the best way to identify truly unmet clinical needs and to iterate possible solutions quickly.

“Although a lot of innovation flows from physicians and surgeons, we also see a lot of ideas coming from nurses, technicians and others in the hospital,” said Karp. “They are often closer to the true clinical and efficiency problems in healthcare.”

Collaborative partnerships are driven by organizations such as OrthoWorx, a community-industry partnership located in Warsaw, Ind.—the heart of the U.S. orthopedic market. OrthoWorx brings together academia, orthopedic experts and industry and community leaders to drive an environment that fosters orthopedic research and innovation.

“One way to spur innovation is by engaging the right resources for an entrepreneurial environment by facilitating an incubator/accelerator within our industry cluster,” said Sheryl Conley, CEO of OrthoWorx. “This includes aligning with local universities to utilize the vast number of innovative and research-oriented assets they offer. There is tremendous potential within universities and start-up companies for collaboration with healthcare providers and orthopedics to advance the industry in numerous ways.”
OrthoWorx plans to develop the Orthopedic Capital Clinic, a collaborative non-profit organization dedicated to clinical and health economic research and medical education.

“Key goals will be to help define innovation and technologies that will advance the future of orthopedic care, while providing opportunities to collaborate with state universities and regional healthcare providers,” said Conley.

The Global Center for Medical Innovation (GCMI) is a state-of-the-art, full-service product development center that also is affiliated with leading medical and academic institutions. Its collaborative environment helps new-product teams sharpen their product development and shorten time to market. In May, GCMI signed a partnership agreement with West Tennessee Health Care to identify, develop and promote medical technology innovation. A key component of this agreement will be an education series designed to address the issues facing entrepreneurial physicians, surgeons and clinicians who are interested in medical device development and commercialization.

Projects currently underway at GCMI include orthopedic implants, complex cardiovascular implants and innovative home healthcare assistive devices.

“Over the past few years there has also been considerable activity in regenerative medicine and biomaterials in orthopedics, particularly sports medicine,” added Karp.“Lately there has been a lot of focus on cartilage regeneration, both on the mechanism of action and on delivery devices.”

Try an Outside Partner
A good way to foster innovation is to bring in other experts to facilitate the exchange of viewpoints and ideas. This often can be done by working with an outside group, even though internal company specialists almost always are the subject-matter experts in their field.

“Sometimes they can use a little help getting out of the day-to day grind and often benefit from a fresh set of eyes,” said Kroll. “External resources also have an enhanced ability to move between applications, cross-pollinate and bring inspiration from adjacent industries.”

Amy Baxter, M.D., a pediatrician and pain researcher, established MMJ Labs in Atlanta in 2006 to develop reusable, inexpensive products for personal pain control. These include Buzzy, a bee-shaped palm device that reduces the pain of injections.

“Outside firms working for hire on projects are a great resource,” said Baxter, who teamed up with Formation Design Group to develop Buzzy. “Other innovators tend to share pretty freely what has worked for them.I share with younger up-and-coming developers, and have had enormous input from others who went before me.I’ve also received great insight from suppliers and manufacturers.”

She also noted that, especially for startups, working with the right design firm can be more affordable than making a bad hiring decision early on.

Finding the Right Talent
Conley pointed out that it isn’t easy to identify innovators. When industry recruits top talent, it tends to look for past evidence of innovation through successful projects. OrthoWorx is developing an integrated model to help recruit more talent and innovation to the orthopedic industry by focusing on place, education and, of course, innovation.

“The foundation of the orthopedic industry is innovation,” she said. “Engaging state universities in clinical research will develop a pipeline of talent. Orthopedics is different than many other life-science segments in that innovation almost always starts with a clinical need. By connecting universities and entrepreneurs with unmet clinical needs, we can marshal the academic and intellectual resources available in our state to produce innovative patient treatments, surgical procedures and even advanced implant devices.”

Formation Design Group looks well beyond resumes to understand how potential new hires think and how they work. The company takes its time with job candidates and prefers multi-day interviews that include the entire team.

“We like to look for people who are passionate about what they do and do it in their free time,” said Kroll. “Academic achievement isn’t the most critical benchmark for us. Being a C student isn’t a bad quality for innovators; neither is previous work experience in a bicycle shop. It’s more about their ability to think for themselves, make connections and advance ideas in tangible ways.”

Good team dynamics are essential for innovation to flourish—this means supporting each other as team members, sharing ideas and credit, and keeping ego in check.

“Too much ego is always a bad thing,” said Kroll. “Sometimes ego gets in the way, becomes its own end and makes for terrible listeners. However, innovation is inherently risky and a little ego or bravado can be helpful. Product innovation is a long term, all-in proposition that requires individual self-confidence and confidence in your team.”

Outstanding team dynamics rarely just happen—they are typically the result of an ingrained, company-wide team culture backed up by intensive training and other forms of reinforcement.

“We have very structured ways to drive innovation including synergy seminars and structured innovation sessions that by design reduce or eliminate the impact,” said Fening. “One of the most important ways to deal with sharing credit is to deal with it as transparently as possible. We always discuss sharing of IP (intellectual property) up-front, which helps to reduce problems later on.”

It’s difficult to generalize about team composition and dynamics when it comes to maximizing innovation, according to Kroll.

“Some problems require deep, focused teams,” he said. “Others benefit from people having a broad overview of multiple disciplines. To a large degree the problem space should dictate a team’s composition. If I had to make one generalization on team dynamics I’d suggest looking for generalists capable of collaborating across multiple skill sets. Some refer to these individuals as ‘T-shaped’ people, or those skilled in collaboration but who also have a practiced specialization.”

Dealing with the FDA
The FDA is evolving and trying to improve its predictability, consistency, communication and response time.As commendable as this is, the FDA is undermanned and shorthanded. Its reviewers must deal increasingly with completely novel, sophisticated, complex medical devices that are much more difficult to evaluate for safety and effectiveness.

“The FDA has the unenviable task of balancing our safety and allowing medical innovation to advance,” said Fening. “Most agree that there are ways that the regulatory process can be improved, and the FDA already has several pilot programs in place.”

Despite these efforts, the lack of FDA consistency is one of greatest deterrents to venture capitalists who want to invest in medical innovation in the United States. As a result, many innovative startups are commercializing in Europe first, which has a predictable regulatory pathway and can grant approvals years ahead of the FDA.

The increase in the FDA’s internal regulatory scrutiny has constrained the pace and cost of innovation in the industry, resulting in an increase in outsourcing clinical research and moving product launches outside the United States.

“In 2004, 86.9 percent of all medical technology clinical trials listed in ClinicalTrials.gov were carried out in the U.S.,” said Conley. “By 2009, that proportion had sunk to 45 percent. The cumulative annual growth rate of U.S. clinical trials 2004-2009 was lower than that of Brazil, China, France, Germany, India, the U.K., Israel and Japan.”

Investors are starting to shy away from products that require full-blown investigational device exemptions(IDEs), which is driving a lot of the traditional innovation elsewhere, Conley indicated.
“The cost is so high that venture capitalists are not willing to invest, for fear that they may not get anything in return,” she said.

Baxter believes the 510(k)-exempt products are making innovating with lower-tech more appealing.For example, Buzzy is a novel combination of a Class I-exempt ice pack and a Class I-exempt therapeutic massager.

“My innovation in combining them and my medical knowledge of how to apply them to decrease pain was insightful, but relatively low-tech,” she said. “I think we’ll see more of these. The current regulation process essentially cuts out all but the biggest or best-funded companies for the more invasive or more ‘bionic’ interventions.”

Karp has seen many entrepreneurs try to argue with the FDA over requirements and endpoints.
“Realistically, if you must clear regulatory hurdles to get your device to the clinic, just do what the FDA asks,” she said.“Present all of your data in a format that they want and don’t leave anything out. Startups cannot expect to put an incomplete application together and expect to sail through FDA review.”

Moving Forward
Innovation in the medical industry continues to make impressive advancements. New materials are being engineered with specific properties like greater strength, flexibility, chemical resistance and heat resistance. Some of the hottest markets continue to be spine, trauma, extremities and biologics. Personalization of procedures and implants, less-invasive approaches to surgery and minimizing surgery time all are high priorities for orthopedic device makers and innovators.

“The potential for procedural advancements and innovation in patient care would be part of the mission of our clinic concept,” said Conley. “If realized, the clinic would provide for a high level of immersion in a practical setting dedicated to innovation in the field of orthopedics.”

Fening indicated that major advances in orthopedic innovation likely will occur earlier in the disease state, when less-disruptive methods can prevent or forestall a disease. “This reinforces the concept of value-driven engineering—less complex surgeries, lower cost of care and better outcomes for patients,” he said. “Advanced materials, biologics and smart implants all are attractive to earlier intervention.”

To gain market share, companies must establish and embrace a culture of innovation and encourage employees to experiment, learn and fail quickly (and inexpensively), noted Karp.

“Common pitfalls that smaller medical device companies face include failure to plan and execute,” she said. “They can have the cure to cancer, but unless they have the right team, a clear understanding of their target market/customer, sufficient intellectual property and a solid quality system, they will suffer.”
Finally, the drive for innovation should be based on what is best for the patient—not profit.

“What really makes innovation work the best is having a relationship between industry and physicians whose primary goal is to improve patient outcomes first,” said Barsoum. “This tends to make all other decisions a lot easier.”