Posted by Marc Dubreuil on Fri, Mar 05, 2010
"Cautiously optimistic" is what one person is calling the outlook for venture capital funding. It's not news to anyone that this industry has fallen on hard times, and it will likely remain troubled for a few years. It is hard to believe how much money was flowing into the VC world when, just two years ago, it was actually considered to be an "asset class." At a recent conference the speaker suggested it was always a niche investment instrument and it will return to that category until the next predicted cycle (roughly ten years) brings the money back to the excitement and heroic returns that drove the IPO markets.
The good news from PriceWaterhouseCoopers indicates that the last quarter of 2009 saw significant funding gains over the prior quarters and over 2008, and Life Sciences funding is leading that comeback. Although the funding is still at its lowest point in six years, the good news for us in the product development business is that the population is aging and we will demand more diagnostics, therapeutics, and procedures/devices.
We heard about two big strategy shifts with investors last year.
In this brave new world everyone involved in start-up funding is practicing "capital efficiency." We used to call it belt tightening, but it's more about higher ROI on your early investment rounds. For us in the product development outsourcing business, it means becoming smarter, more nimble, and more effective at bringing safe and competent solutions much earlier in the game. We use analysis, prototyping, and testing in quick iterative steps to confirm our concepts and ideas, but the pressure is on to get to animal, cadaver, and human trials as major milestones in the validation of products and investments.
Another major speculation was regarding the shift from early-stage investment to later stage opportunities. The prognosticators were suggesting that later stage investments may compromise equity positions, but they also reduced risk and shortened the time to an exit event. Interestingly enough early stage funding grew to $1 billion in the fourth quarter of 2009 vs $649 million in the same quarter of 2008 while late stage funding declined over the same period in almost identical numbers.
The best news probably came from reports and blogs from the annual JP Morgan event recently held in San Francisco. The news is that private investors are getting back into the game and that VCs are back to raising funds. It all sounds so hopeful, and then you read about the FDA overhauling the 510K process. Just when we thought the money was coming back and the healthcare reform bill was dying to give us a hint of hope, the FDA turns on the warning lights to all of us in Life Sciences product development. Stay tuned.
Posted by Matt Harkins on Mon, Mar 01, 2010
Due to the buzz surrounding social media, it seems people have shifted their focus away from traditional networking events. While social media and online networking provide added value, you cannot abandon the traditional networking events that foster growth, collaboration, and innovation in the medical device community. I'm a business development manager here at Farm and can testify to the benefits received from attending medical device networking events. Networking has not only contributed directly to top-line growth by bringing in new projects and prospects, it has also helped us build brand recognition as a leader in medical product development.
The New England region has a number of valuable medical device specialty interest groups that are great venues for networking with industry professionals and promoting your services to prospects. It would be overwhelming to attend them all, so it is important to identify the meetings where you can add the most value and gain access to the right group of prospects. Here are some groups in the medical device industry that I have found to be valuable:
Medical Development Group (MDG)
MDG holds networking meetings in Waltham, MA on the first Wednesday of each month. MDG combines networking meetings with a forum session where industry experts are brought together to discuss different topics of interest in the medical device industry. Past topics have included healthcare reform and its affect on medical technology usage, the emergence of drug delivery and combination products, future trends in women's health products, trends in medical devices, and why devices fail and how to prevent it from happening. Farm has been an MDG sponsor for five years now. We have gained excellent visibility and brand recognition due to our affiliation with its networking sessions and forum meetings.
MassMEDIC
MassMEDIC provides a number of different networking opportunities throughout the year. In addition to its annual Investors Conference in the fall, MassMEDIC hosts smaller networking sessions with a range of relevant topics from the Massachusetts Gift Ban Law to best practices in the 510K process. MassMEDIC has also started MedTechIGNITE to help foster medical device companies through their early stages of conceptualization, formation, and product development. MedTechIGNITE offers its own networking sessions geared toward medical device startups and entrepreneurs seeking advice in Massachusetts.
Merrimack Valley Venture Forum (MVVF)
MVVF provides a variety of valuable events for the technology and scientific industries. It is important to identify the meetings that fit with your networking needs. The MVVF provides multiple sessions for medical device startups to pitch their business plans to an audience of potential investors, service providers, and business partners. In the past these events have attracted a number of startups from the orthopedics, urology, women's health, cardiology, and biotech markets.
Tradeshows
In addition to networking groups, tradeshows offer another great venue for networking with industry professionals. Throughout the year Farm exhibits at a number of tradeshows that are geared specifically to the medical device design and manufacturing community. We recently exhibited at MD&M West in Anaheim, CA. It was our first time exhibiting on the west coast and we were overwhelmed by the positive response we received. In addition to meeting new prospects in need of development services, we were able to reconnect with a number of former colleagues. Exhibiting at the show served as a powerful reminder of how important it is to get out and promote our services to our target audience.
It is important to remember that you won't walk away from every networking event with an opportunity. Networking is a cumulative effort where persistence pays off. You'll benefit from being a regular attendee and finding additional ways to get involved. Establishing more visibility in your industry will help you build brand recognition and increase the chance that your prospects will know of you when you reach out to them.
Posted by Jack Harkins on Thu, Feb 18, 2010
Have you seen the recent Verizon FiOS ad on television? The one where a focus group is being conducted on high-speed fiber optic service? After the users weigh in, the technician (cable guy) asks why they are talking to users anyway. The Verizon tech (smart guy) only needs to say "oh boy" to make the point that the competition just doesn't get it.
I've been in the product development business for forty years and the industry has come a long way since the early '90s. Back then there was marketing and there was engineering. One was focused on the competition and the other was focused on the technology. We in the design community talked about the importance of user needs research, but it was serious missionary work back then.
Today companies are acutely aware of the importance in understanding the end-consumer's needs but have been slow to adopt a rigorous process to meet those needs, even those companies in the medical device industry. Over the last five years, the FDA has strengthened its emphasis on usability and human factors guidelines. This requires companies to demonstrate best practices, including field research to learn user needs, preference testing of early concepts with customers, and usability testing of both prototypes and pre-production units for verification and validation. Rather than testing individual devices for safety and efficacy, there is a renewed focus basically saying- there's a right way to do this and we will evaluate your process to make sure you did it that way.
This is a blessing in disguise for device manufacturers due to the fact that it can provide many competitive advantages such as significant cost reductions, including the prevention of expensive device modifications. Medical device manufacturers are also able to minimize risk on liability and recall expenses. User research and validation ultimately yields a product that is easier to use, quicker to adopt, and improves patient treatment.
With user needs research lives have been saved and accidents associated with improper usage are now being avoided. With all of these positive aspects, it's still confusing to me why companies don't leverage the user research benefit earlier into the development process. Why do you think companies are so reluctant?
Posted by Chris Loughnane on Fri, Feb 12, 2010
A bunch of labels with green letters and nature motifs. That's all sustainability appears to be.
I consider myself a sustainability advocate, but the explosion of vague claims and misleading marketing has me empathizing with the companies that choose to just leave it alone. Unfortunately, they're likely missing out.
The truth is that there is a market for green products, and it's growing.
The Market for Sustainable Products
Sustainable products give me the warm-and-fuzzies, but the bottom line is that if the market doesn't approve, the product is a giant failure.
So how does the market feel?
Business-to-Business Markets
In 2009, Terrachoice (of McKinsey's "Helping 'Green' Products Grow") published their EcoMarkets 2009 Report. The report is a compilation of responses from 587 professional purchasers on the state and future of green B2B purchasing. You can check out the 26-page report when you've got an hour to kill, but check out these highlights:
- Most purchasers see no difference in performance between green and traditional products.
- Four out of five purchasers who consider our economy in a "recession" anticipate an increase in green purchasing in their companies.
- Three out of four purchasers who consider our economy in a "depression" anticipate an increase in green purchasing in their companies.
- Purchasers of electronics deem the importance of take-back programs second only to energy efficiency.
Consumer Markets
Terrachoice also recently published a report geared toward consumer products. "The Greenwashing Report" (another 26-pager) looks at green claims made by manufacturers. A few highlights:
- More green products are on the market.
- More products are making green claims, but most (98% of products) are deceptive.
- 80% of the time deception takes the form of hiding tradeoffs, showing no proof, or being vague.
- Legitimate eco-labeling has nearly doubled in the past year.
If I were to sum up the three reports in one sentence it would be this:
Even in the current economy, people are willing to pay a premium for sustainable products that function as well as their traditional counterparts.
They just don't want to be duped.
Tapping the Sustainability Market
Make a great sustainable product and be honest about it. Trust is what loosens purse strings (just ask Chris Brogan). Purchasers and consumers alike are (rightfully) becoming more and more wary of green claims.
Low-class tricks like stamping product with "No CFCs!" (they're illegal, of course you aren't using them) or the logo of your company's own internal "green team" (not-so-subtly implying 3rd-party certification) will damage your reputation in the not-so-long run.
Instead of trying (read: failing) to make a quick buck, take advantage of the current situation. The marketplace is increasingly populated with enlightened consumers and misleading products. It's an opportunity to gain the trust of would-be-buyers.
Just do the work. Develop a product that's sustainable, and then prove it.
What's Sustainable Enough?
"Greening" a product is not inherently expensive. It's your customers that determine how far you need to go.
If you cater to the hemp-and-granola set, they might demand everything be made of recycled cardboard. If you're courting hospital purchasers, they might be more accommodating to your sustainable claims.
Before you spend a dime on designing a green product, do the user research to know how far you must go to make greening worthwhile.
Designing A Sustainable Product
When designing a sustainable product, it helps to have a healthy knowledge base. It's nice, for example, to know that aluminum is infinitely recyclable and that (currently) wind power has a smaller impact than solar power.
But our world is driven by budgets and time-to-market. That knowledge needs to be focused to get the most bang for your green buck.
The best way to focus is a life-cycle analysis (LCA).
Simply put, an LCA is the best way to measure the environmental impact of a product throughout its production, transport, usage, and disposal.
Software packages like Sustainable Minds streamline the process by calculating an impact score. The score is determined by looking at the individual impact of a product's material, manufacturing process, transportation mode, distance traveled power usage, power source, and disposal method.
For example, if you were to minimize the impact of a coffee maker, you would do well to focus your development efforts on reducing power consumption (think of how much energy/$$$ it consumes during the usage phase) as opposed to using a biodegradable material.
Once you've isolated opportunities into "greening" design inputs, it's development as usual.
Proving It's Sustainable
You can submit for third party certifications for some types of products. Energy Star, EcoLogo, and Green Seal for example, are three of the most easily recognized certifications in the U.S.
Third party certifications are great. They're clean, they're official, and they work.
That being said, social proof is best. Have a public conversation (not a stale page on your company website, a real conversation) about how user research fed into the sustainable design of your product.
A rock-solid sustainable product, a conspicuous absence of deception, and an open conversation. It's tough not to trust that.
Posted by Beth Loring on Wed, Feb 03, 2010
Most medical device manufacturers now know that usability validation is required for both CE Mark and US FDA approval of medical devices. Usability testing is a specific type of user testing in which a trained moderator presents a representative user (nurse, radiology technologist, surgeon, or whomever) with a product or prototype and asks the user to perform tasks for which the device was designed. Although usability testing can (and should!) occur iteratively during the design process, a final validation test is required to show that users are able to operate the device safely in an actual or simulated use environment, and that any residual risks are mitigated.
Importantly, the quality of usability test results depends largely on the skill of the moderator and his or her ability to select the right tasks, determine the appropriate data to collect, and remain neutral and unbiased when interacting with users. In fact, moderators have three roles they must carefully balance: the Gracious Host, the Leader, and the Neutral Observer. Moderators also need to know how to handle situations in which a user fails a task, completes a task incorrectly without realizing it, or becomes frustrated, among other things. Moderating isn't easy; it takes skill and practice.
A couple of months ago I was invited by my friends at User Interface Engineering to present a virtual seminar (webinar) called "Effectively Moderating Usability Tests." During the webinar the audience submitted insightful questions, like:
- "What's the impact of using the same test participant more than once?"
- "What do you think is the maximum reasonable amount of time for a test session?"
- "If participants get off topic, how can you tell whether they don't understand the task or the user interface is unclear?"
These and other questions were answered in a follow-up podcast.
If you're creating your Usability Validation Plan, and have questions about when and how to conduct testing with users, feel free to reach out to me.
Posted by Rose Anderson on Fri, Jan 22, 2010
What is the everyday consumer's perception of sustainability in the medical and health categories? Will there be an expectation for environmentally responsible health products alongside the rise of "green" consumer products?
We posed these questions to commuters passing by Farm's World Usability Day exhibit at South Station in Boston. What words come to mind when they think about sustainable medical products?
The word cloud above shows the variety of responses and reoccurring themes. Recyclability, reusability, safety, and disposal were the primary concepts expressed by the respondents.
The commuters we spoke with represented a range of perspectives - from those unfamiliar with sustainability as a "green" concept to those who were founding members of Boston's many "green" organizations.
The exercise prompted a few participants to think about the environmental impact of consumer health products for the first time. Some felt that the concept of a sustainable medical product was contradictory - that the challenges of safety and efficacy were too great to also be concerned about environmental impact. Others spoke about their ongoing concern about the unsustainable environmental impact of single-use medical products being disposed of on a mass scale.
Considered as a whole, this snapshot survey reflects consumer sensitivity to reducing waste (concerns about disposal and preference for re-use and recyclability). A concern for safety was expressed as well, not only for the product's immediate clinical use, but also for the product's long-term impact on human health and the environment.
This observation is supported by the growth of organizations focused on this issue, such as Practice Greenhealth and Health Care Without Harm. Industry is also responding, with medical device companies such as Baxter and Medtronic listed at the top of Newsweek's 2009 Green Rankings, taking steps toward sustainable choices in their product development processes.
Do you expect to see medical and healthcare products influenced by sustainability practices in the future?
Where do you see opportunities for sustainability in the medical and consumer health categories?
Posted by Marc Dubreuil on Wed, Jan 06, 2010
For those of us who make our living in the world of medical product development, the future seems very uncertain based on current economic and political trends.
The struggling economy is forcing venture capitalists (VCs) to find and fund products and opportunities that are less risky and farther down the development and commercialization path. VCs are moving away from early-stage medical devices to later stage and energy investments, where returns may be lower but the exit is visible and predictable.
The FDA is undergoing a culture shift and is trying to get a better handle on the appropriate level of clinical data to support safety and efficacy. Recent news suggests that the 510k process will remain largely unchanged; but anyone who's been waiting on 510k decisions knows that it has become a much more arduous process over the last 18 months.
And what effect will the pending Health Care reform have on the ability of the medical device industry to innovate and introduce new products? In a well researched, documented, and written book by T.R. Reid, titled The Healing of America, the subject takes a page from the experiences in Japan. Japan uses a single national fee schedule that sets fixed prices for all procedures. For example, an MRI in the US costs $1,000 to $1,400. The fixed price for an MRI in Japan is $105. So the Japanese service providers turned to the MRI manufacturers and demanded lower cost equipment. The manufacturers responded with machines with more advanced features that cost about one-tenth the cost of US units. Most of the product innovation in Japan comes from small hospitals associated with large medical schools while medical companies are focused on cost out.
As we start to move more plan participants to public options, will Medicare and Medicaid face the same regulated price limitations? Will the development of new life-saving Health Care technologies be strangled by the system? Will our new product development be driven by cost and not effectiveness? Time will tell.
Posted by Darrin Manke on Tue, Dec 22, 2009
From Consumer to Medical Product
For years now the iPhone and iPod Touch have been blurring the lines between what is a defined as a consumer or medical product. I recently ran across a few articles that described how medical students and physicians use their iPhones and iPod Touches for all types of assistance throughout the day. One article in particular, The iPod Touch Medical PDA: Med Students Best Friend, from lesterlung.wordpress.com listed a med student's top ten uses for his iPod Touch. A few are listed below:
- Translator: "I can keep an entire Obstetrics/pregnancy workup in Spanish on hand while on my Ob-Gyn rotation during which I have encountered many patients who only speak Spanish."
- Calculator: "Calculating nutritional balance (whether with infant formula or total parenteral nutrition) in the NICU, assessing urine output and fluid intake, and determining the amount of fluid with which to replenish and maintain a pediatric patient".
- Mediquations: "There are numerous medical equations and algorithms that dictate patient care, and instead of Googling the equations on a hospital computer or memorizing all of the equations, it is much easier and faster to use one of these apps to accomplish the task. Some of my frequently used equations: Temperature Conversion and Urine Output. Next month on my Internal Medicine rotation: FENa, Corrected Sodium, GFR, etc".
- Epocrates Rx: "I use it to figure out the indications for a medication, to determine its real spelling (since patients often mispronounce the name) and alternate name, to determine the dosages for writing orders or prescriptions, to determine the cost, to determine contraindications and adverse reactions, etc. Also, Epocrates Rx has an excellent Interactions Checker that allows one to input multiple medications".
Another article written by Ashlee Vance of the New York Times describes a patient with ALS who uses her iPhone to translate text into speech instead of using the multi-thousand dollar insurance-approved device. Is this just the beginning? How quickly will this trend grow and when will the FDA step in to insist that regulatory compliance is required if the iPod Touch is going to be used for specific patient care and other clinical use? I can easily see vital sign monitors wirelessly networking to these types of devices for constant patient monitoring by hospital staff and a host of other uses within the hospital. With over a thousand current applications and new ones being created daily, it will certainly be interesting to see how these multipurpose electronic devices expand into the medical space and if Apple will evolve into a medical device company.
We are very interested in your input. Please send us your thoughts if you are aware of other medical uses and applications or if you just want to comment....
Posted by Tristan Sedgwick on Mon, Nov 23, 2009
We are pleased to announce the launch of the Farm blog. Our intention for launching this Blog is to engage, inform and inspire you. Who are you…?
- Our clients
- Prospects
- Vendors
- Employees
- Future farmers
- Industry-innovators and thought-leaders
At Farm we believe that two heads are better than one and collaboration is the key to uncovering and discovering new ideas and innovations. Over the thirty-plus years we’ve been in the product development business, we’ve learned that networking is critical and we felt that this blog would be a great way to establish an open forum to bring together a diverse mix of successful industry professionals to talk openly by sharing each others experiences and knowledge. We hope to engage you with topics that are informative and inspirational, and invite you to contribute to the conversations. We encourage you to subscribe via email or RSS feed - Your interaction is fundamental in making this blog a success. Feel free to shoot us an email too; we welcome your comments and suggestions and look forward to an on-going, thought-provoking dialogue with you!
Thanks,
The Farm Team
http://www.farmpd.com/ info@farmpd.com
Posted by Joe Civiello on Fri, Nov 20, 2009
I recently attended the 2009 Medical Design & Manufacturing Midwest (MD&M) trade show in Chicago as an exhibitor. Many of the attendees that stopped by the Farm booth were representatives from non-medical contract manufacturers. Was I surprised? Not really. This trend is becoming very popular since these manufacturers are looking for new markets to expand into due to the challenging economic conditions they face in their industries. The individuals that I spoke with are currently in the automotive and industrial industry and had asked for advice on how to successfully gain entry into the medical device space.
Entry for these manufacturers will require them to establish and follow an internal quality system compliant to FDA's Current Good Manufacturing Practices (CGMP's) as it relates to 21CFR820 and the FDA Quality System Regulations.
My Suggestions to them included the following:
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The first step - Compliance with ISO 13485 standards.
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Do you have a quality system in place and relevant SOP's?
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Business and cost considerations in developing a quality system (and its subsequent certification) must be measured against the return of possible new business opportunities.
It remains to be seen if these non-medical manufacturers will take the leap or if they'll decide the cost of entry is just not worth the risk.
I'm interested in your feedback/comments...