{"id":38405,"date":"2021-06-06T08:10:00","date_gmt":"2021-06-06T12:10:00","guid":{"rendered":"https:\/\/www.shortform.com\/blog\/?p=38405"},"modified":"2021-06-18T11:08:13","modified_gmt":"2021-06-18T15:08:13","slug":"medical-device-industry","status":"publish","type":"post","link":"https:\/\/www.shortform.com\/blog\/medical-device-industry\/","title":{"rendered":"The U.S. Medical Device Industry: Behind the Scenes"},"content":{"rendered":"\n<p>How does the medical device industry work in the United States? Who are its main players? How much market share do they have?<\/p>\n\n\n\n<p>The United States medical device industry is dominated by a few major players: Medtronic, St. Jude Medical, Boston Scientific, Stryker, and Zimmer Biomet. Like other segments of healthcare, they have consolidated over time.<\/p>\n\n\n\n<p>Here is a brief overview of the United States medical device industry.<\/p>\n\n\n\n<!--more-->\n\n\n\n<h2 class=\"wp-block-heading\"><strong>The History of Medical Devices<\/strong><\/h2>\n\n\n\n<p>Many device makers began in hardware or consumer electronics. Medtronic started in 1949 as a medical equipment repair shop.<\/p>\n\n\n\n<p>In 1969, surgeon Denton Cooley implanted the first artificial heart in patient for 3 days without FDA approval.<\/p>\n\n\n\n<p>In 1976, the FDA defined three classes of devices that need different levels of approval.<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>Class 1: These cause little risk and deserve little scrutiny, like tongue depressors.<\/li><li>Class 3: These are life-sustaining or potentially life-threatening, thus requiring extensive testing. This includes pacemakers.<\/li><li>Class 2 is in between, and it\u2019s governed by a program called 510(k)<\/li><\/ul>\n\n\n\n<p>The scrutiny in class 2 is so much lower that <strong>most devices are submitted under this designation, including devices you might consider to be potentially life-threatening<\/strong> such as joint replacements and surgery clips. Class 2 applications outnumber class 3 by 60 times.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Class 2 Regulation<\/strong><\/h3>\n\n\n\n<p>The bar for class 2 is relatively low. You need only claim that your device is \u201csubstantially equivalent\u201d to a product already sold and used for the same purpose.<\/p>\n\n\n\n<p><strong>Class 2 requires far less testing than class 3.<\/strong> Only 10% of FDA class 2 applications contain clinical data\u2014many devices aren\u2019t even tested in animals before placing into humans, and most offer no clinical trials at all. Class 2 devices aren\u2019t required to be proven \u201csafe and effective\u201d like drugs are.&nbsp;<\/p>\n\n\n\n<p>As a result, the FDA has little issue approving the devices. FDA cleared 85% of devices under the \u201csubstantially equivalent\u201d criterion. The FDA spends 1200 hours reviewing class 3 devices, compared to only 20 hours for 510(k) requests.&nbsp;<\/p>\n\n\n\n<p>Some manufacturers don\u2019t even seek FDA approval for new models, since they don\u2019t consider the new version \u201csubstantially different\u201d from older models. However, patients don\u2019t always know the device is experimental and don\u2019t consent to it.<\/p>\n\n\n\n<p>Despite the fact that the devices are \u201csubstantially equivalent,\u201d if a specific device is recalled, there is no recall mechanism to recall equivalent devices. Furthermore, complications are hard to detect\u2014generally, reporting of complications is voluntary, unless the FDA mandates it.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Device Marketing<\/strong><\/h3>\n\n\n\n<p>The easy clearance of \u201csubstantially equivalent\u201d devices means they\u2019re largely interchangeable and thus don\u2019t have a clear product or performance advantage. As a result, marketing and sales agents need to intervene to push products.<\/p>\n\n\n\n<p>This results in a variety of <strong>questionable relationships between the medical device industry and doctors<\/strong>.<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>Device companies court doctors during residencies and fellowships. They get their brands partnered with major training programs.<\/li><li>Device manufacturers target less experienced surgeons, who are less resistant to new technology or less aware of the device\u2019s risk and lack of marginal benefit.<\/li><li>Manufacturers reward \u201cinfluencer\u201d doctors with patents, profits, and grants.&nbsp;<\/li><\/ul>\n\n\n\n<p>Surprisingly, <strong>device reps can serve as unpaid assistants in the operating room.<\/strong> Theoretically, they\u2019re on hand only when a device is used. They don\u2019t scrub into surgery, but they point to things that should be used in specific places and help troubleshoot. These device reps make money through commission only.&nbsp;<\/p>\n\n\n\n<p>The natural bias will be to favor devices from companies whose reps are more likeable and helpful. <strong>Since they like the rep and know she\u2019s paid on commission, they\u2019ll skew to higher priced items. <\/strong><a href=\"https:\/\/journals.plos.org\/plosone\/article?id=10.1371\/journal.pone.0158510\">As a device rep reports<\/a>, doctors \u201cfeel somewhat obligated to use the most expensive device because they obviously called you in for it.\u201d In response, hospitals have demanded device reps be registered and get permission to enter premises, like lobbyists.&nbsp;<\/p>\n\n\n\n<p>Says a device rep, \u201cit\u2019s nearly impossible to break into the market &#8211; it\u2019s all about these relationships.\u201d<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Device Differentiation and Pricing<\/strong><\/h3>\n\n\n\n<p>Devices are often largely interchangeable, so there is little differentiation between them.<\/p>\n\n\n\n<p>To address this, manufacturers use proprietary screws, tools, and \u201coperating systems\u201d to generate complexity. Because the requirements are often changing, this pushes doctors to ask for more device reps on hand to help figure out how to use the devices.<\/p>\n\n\n\n<p>Manufacturers use pricing pressure to push adoption of the new version of the device. For example, they price the older version at the same price as the new one, so it stops being cost effective.<\/p>\n\n\n\n<p><strong>What can hospitals do to lower device costs?<\/strong> They can limit the range of devices used, so they gain bargaining power over the manufacturer. They can also close down product marketing, requiring proposals to get quotes from manufacturers to compete with each other.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>How does the medical device industry work in the United States? Who are its main players? How much market share do they have? The United States medical device industry is dominated by a few major players: Medtronic, St. Jude Medical, Boston Scientific, Stryker, and Zimmer Biomet. Like other segments of healthcare, they have consolidated over time. Here is a brief overview of the United States medical device industry.<\/p>\n","protected":false},"author":7,"featured_media":39197,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[45,81,16],"tags":[380],"class_list":["post-38405","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","category-economics","category-health","tag-an-american-sickness","","tg-column-two"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v24.3 (Yoast SEO v24.3) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>The U.S. Medical Device Industry: Behind the Scenes - Shortform Books<\/title>\n<meta name=\"description\" content=\"The U.S. medical device industry is dominated by a few players. 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