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How the medical supply industry blocks device startups from selling to hospitals

washingtonmonthly.com

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Re: How the medical supply industry blocks device startups from selling to hospitals

#31
post #12

This caught my eye: Kaiser spokesman Jim Anderson argues that if Shaw’s products didn’t make their way to hospitals it was because of “significant supply issues” on Retractable’s end. He also says they were prone to malfunction and that, in several cases, needles detached and were left “stuck in the arms of patients.” I'm doubtful that a Kaiser spokesman would fabricate these problems, which leads me to believe that…

"After months of trial and error, Shaw hit on the idea of surrounding the tip of the syringe with six petal-like flanges, which could flare open to make way for the catheter port. Unlike some of the solutions floated by big medical device makers, such as coating the ports with silver, Shaw’s innovation added only a few pennies to the cost of production. And it seemed to be remarkably effective: a 2007 clinical study funded by Shaw’s company and conducted by the independent SGS Laboratories found the device prevented germs from being transferred to catheters nearly 100 percent of the time. "

As someone who is trying to finish his Master's thesis relating to prostate cancer, claims like this make me cringe. It's like paying a marketing group to conduct a survey for you. Of course the results will be positive.

I didn't read the whole article since it's pretty long, but I bookmarked it for later. But this guy managed to burn through $42 million dollars and still hasn't achieved wide adoption?

If this was really about getting his superior technology to market, he would attempt to strike a licensing deal with these companies instead of trying to supplant them.

Fact is, many people in medical device and healthcare industry claim to be conducting research and ground-breaking work in the name of making people's lives better. But in reality, they're looking to get rich off of it. I respect that, but at a certain point, you need to decide what's more important: your personal profits, or the lives of the people you claim to be dying from this issue.

The guy who invented/discovered/extracted insulin didn't patent it/the process, even though he could've made tons of money. Again, if you want to make money, I respect that. But in that case, don't go whining about lives being lost.

I wish this guy luck, because it sounds like he has something new and novel. He just needs to realize that he has to pivot, not persevere.

Re: How the medical supply industry blocks device startups from selling to hospitals

#32
post #12

This caught my eye: Kaiser spokesman Jim Anderson argues that if Shaw’s products didn’t make their way to hospitals it was because of “significant supply issues” on Retractable’s end. He also says they were prone to malfunction and that, in several cases, needles detached and were left “stuck in the arms of patients.” I'm doubtful that a Kaiser spokesman would fabricate these problems, which leads me to believe that…

>I'm doubtful that a Kaiser spokesman would fabricate these problems

I'd also be surprised if what was said didn't turn out to be technically true, but that's not really the point, which is to spread FUD. Raising vague, out-of-context allegations is a time honoured mudslinging technique and I hate to see it accepted without question.

> “significant supply issues” on Retractable’s end

Out of context this is meaningless. What is a significant supply issue? It could be anything and everything, including this guy not liking the colour of the packaging or any other triviality.

It sounds odd to me that a company with $42MM in funding and desperately trying to move its products for over a decade would have anything other than a gross oversupply.

> prone to malfunction and that, in several cases, needles detached and were left “stuck in the arms of patients.”

This statement would be technically true even if the product in question was less prone to malfunction and needle breakage than the incumbent product! Without any sort of context, however, it is at best ambiguous and at worst quite possibly deceptive.

It's very possible to deceive and mislead without ever actually telling a lie.

Re: How the medical supply industry blocks device startups from selling to hospitals

#33
post #24
post #12

This caught my eye: Kaiser spokesman Jim Anderson argues that if Shaw’s products didn’t make their way to hospitals it was because of “significant supply issues” on Retractable’s end. He also says they were prone to malfunction and that, in several cases, needles detached and were left “stuck in the arms of patients.” I'm doubtful that a Kaiser spokesman would fabricate these problems, which leads me to believe that…

On the other hand, here's another quote from the article: "Without a GPO contract, it doesn’t matter how good your product is. Even if I could wave this wand over your body and cure you from cancer, chances are I couldn’t sell it to hospitals" The core problem is, big manufacturers offer discounts (or bigger kickbacks) for bundling. A niche product is unlikely to succeed, even if it's obviously better. A product that…

"The core problem is, big manufacturers offer discounts (or bigger kickbacks) for bundling. "

Yeah someone can correct me, but to add to the point: hospitals have razor thin margins. If I remember correctly, it's 10% or less.

Re: How the medical supply industry blocks device startups from selling to hospitals

#34
post #12

This caught my eye: Kaiser spokesman Jim Anderson argues that if Shaw’s products didn’t make their way to hospitals it was because of “significant supply issues” on Retractable’s end. He also says they were prone to malfunction and that, in several cases, needles detached and were left “stuck in the arms of patients.” I'm doubtful that a Kaiser spokesman would fabricate these problems, which leads me to believe that…

As a doctor and health-tech startup founder (although not based in the US), I can confirm that this reporting is bullshit.

First of all healthcare is a very conservative space. Unless your product demonstrate a truly significant progress, nobody will give an eye at you. The decision making progress is very slow and very conservative. So even without the big medical supply corp, Shaw might never had a chance anyway.

"And it seemed to be remarkably effective: a 2007 clinical study funded by Shaw’s company and conducted by the independent SGS Laboratories found the device prevented germs from being transferred to catheters nearly 100 percent of the time"

Cigarette companies have sponsored plenty of "independent" studies that shows that cigarettes are not detrimental and even healthy. So take that with a grain of salt.

"But Shaw still isn’t any closer to breaking into the hospital market, and in the meantime the life on his patents is dwindling."

Really? Patients losing their life over some IV caps?? IV caps are always going to be more prone to infection when compared to needles (since well, those caps are stuck in there for weeks while needles are disposable), but nurses are trained to look at sign of infections ASAP.

Re: How the medical supply industry blocks device startups from selling to hospitals

#36
post #12

This caught my eye: Kaiser spokesman Jim Anderson argues that if Shaw’s products didn’t make their way to hospitals it was because of “significant supply issues” on Retractable’s end. He also says they were prone to malfunction and that, in several cases, needles detached and were left “stuck in the arms of patients.” I'm doubtful that a Kaiser spokesman would fabricate these problems, which leads me to believe that…

As a doctor and health-tech startup founder (although not based in the US), I can confirm that this reporting is bullshit. First of all healthcare is a very conservative space. Unless your product demonstrate a truly significant progress, nobody will give an eye at you. The decision making progress is very slow and very conservative. So even without the big medical supply corp, Shaw might never had a chance anyway. "…

FYI, that last line says "patents", not "patients".

Re: How the medical supply industry blocks device startups from selling to hospitals

#37
I can tell you from firsthand experience (as an investor) that the gist of this article is 100% correct: there are significant barriers to bringing a new medical device to market that have nothing to do with the merits of the product or the supply chain, but are quite simply pure protectionism for the established players. If anyone wants details, contact me privately.

Re: How the medical supply industry blocks device startups from selling to hospitals

#38
post #14

I'm glad that our startup isn't dealing with medical devices, only with software. Still, I've been working with some medical device makers and it is a wild and crazy world they work in. The whole GPO system is clearly broken, but I've met some people - at device makers no less - that are passionate about ending it. We're doing our part to help that along.

Can you be more specific about what you're doing? I'm in medical device and I would love to see software startups help untangle the mess that is healthcare reimbursement and purchasing.

Re: How the medical supply industry blocks device startups from selling to hospitals

#39
post #27

Earlier quoted context omitted.

Because that's defamation.

Do you have any evidence to support them being especially ethical, or is this just a gut reaction? The facts are that we don't have enough facts, we have an unsubstantiated accusation that should be treated as such.

Countering an unsubstantiated accusation with another unsubstantiated accusation isn't going to get us anywhere.

It's not about being ethical. It's about exposing yourself to liability.

Re: How the medical supply industry blocks device startups from selling to hospitals

#40
As an entrepreneur I have dedicated most of the last 25 years to doing hardware (read: manufacturing) ventures. Manufacturing in the US is hard, if not impossible, save cases where the ecosystem or nature of the market can support it. Problems one could face include: ip (patents) mine field, government regulations, liability issues, lack of localized supply chains, high labor costs, high insurance costs, high taxes and more.

Then, to boot, if you are lucky enough to have to deal with the government or in an industry where government has decided they know better, well, this can be described with two words: Pain and Frustration.

The mechanisms described in the article kept me from even considering making an effort to do some good in the medical field. It's just too painful.

Finally, about two years ago, I had enough and decided to be done with making stuff and pivot into software-only products. This was not a huge pivot in that most of the products we manufactured during the last 20 years had significant software elements (embedded, FPGA and related workstation applications). The transition just meant making a very conscious effort to not go after hardware ideas. This was hard in that I personally like making physical products. But, no more.

My point in relating this personal story is that I have the scars to understand what this little syringe company must have been through.

The article in question highlights something that we should all understand very well at this point: Government rule-making is, more often than not, fraught with unintended consequences that, ultimately, end-up costing us in terms of money, freedom and choice. And, when it comes to the medical field, might even result in people dying.

Part of the problem is that we continue to give the keys to the shop to bureaucrats who have zero real-world, business or employed-by-a-non-government-business experience. You really can't expect much from anyone who has lived their entire life within the confines of an ecosystem where personal decisions carry almost no risk. That is vastly different from the real world, where, if you are a bad programmer or lousy barista you get fired and, no, you don't get to enjoy 80% of your salary for the rest of your life.

Programmers, for example, know and live this issue of making the wrong decision. In the course of solving a problem we choose an approach and go with it. Sometimes it works and often-times there are unintended consequences that need attention. Other times the approach is entirely wrong and has to be scrapped in favor of a different idea. The solution is evolved rapidly until the right approach surfaces. This ultimately leads to better solutions, particularly if peer reviewed.

The trouble with government decision making is that you have the equivalent of managers who don't know how to code --at all-- telling you what algorithm and database to use to solve a problem. Furthermore, it is equivalent to these non-technical managers making their decision the law for the company. And, yes, regardless of what the overwhelming reality of the matter might indicate, changing their laws is either impossible or you need 2/3 of said morons (non-technical managers) to agree to the change. In other words, you should expect the beatings to continue until the morale improves. Of course, reality in the technology world is closer to the idea that those who actually understand the subject should make the decisions. Wouldn't it be cool if every single politician had to have a real job 3/4 of the year? Work three months for government and then go back to the private sector. Now that could be interesting.

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