Medical Device Link.

PRODUCT DEVELOPMENT INSIGHT

Product development in the medical device industry is different from that in other industries. For one thing, government regulation, applicable throughout the product development process, has strong implications; this is not the case when designing a toy or a lamp or a handheld remote control. Designing medical devices that are easy to use, look good, and are functional is challenging in a different way—lives are at stake. Medical products used for diagnosis, to prevent disease, or otherwise to affect the function of any bodily structure must be well-grounded on a thoroughly researched body of knowledge.

Aside from government regulation, both reimbursement strategies and pricing also influence much of the product development process. A complicated matrix of business providers and end-users—patients, physicians, providers, and payers—must be taken into account. But all of this is for naught if the need is not clearly defined. That’s where multiple modalities of research come into play. Research can help eliminate uncertainties and risks when moving from concept to commercialization, to launch and acceptance into the marketplace.

Users may be the patients, but users also include technicians, surgeons, trainers, nurses, and therapists. Each of these users’ needs should be investigated and understood. The needs must be translated into functional requirements and then into design features.

To do so, the medical device industry uses multiple modes of research at various stages in the continuum. This article addresses the various research modalities used in the product development cycle. A variety of free and fee-based sources are mentioned.

The three pillars of product innovation are a high-quality new product development process, a defined new product strategy, and adequate resources.¹ Successful product innovation requires following a proven path to achieving long-term objectives through use of a new product development process. Such a process includes preparation (research market potential, create a business plan and model, etc.) and exploration (develop clinical, regulatory, reimbursement, and competitive knowledge; assess product competitiveness; and perform patent research).

The second pillar, a new product strategy, identifies product development, positioning, and pre- and postlaunch measures to take to meet the plan. The third pillar, resources, addresses the requirements for execution: these are research, funding, and personnel.

Secondary research is concerned with published data, as opposed to primary research, which is not. Secondary research is typically conducted first, and primary research is used to verify published data or to discover information that is in someone’s head rather than online or in print. For example, a primary researcher could speak with physicians to test early assumptions and their attitudes, while secondary research could be conducted to scope out market size and standards of practice of key addressable markets dealing with a similar innovation. Typical research-driven projects that go into a successful product development innovation continuum include the following items.

Market Assessment. This is done early in the project to determine market size, customer needs, and likely market acceptance. Market assessment takes into account distribution, pricing, intellectual property, geographies, reimbursement strategy, procedures and codes, etc., using secondary and primary research.

Studies of User Needs and Wants. These are necessary to develop the product idea into a winning concept. Concept identification may involve in-the-field surveys, interviews, and focus groups, as well as extensive secondary research using a variety of news and content sources and other primary research such as ethnography.

Competitive Analysis. This is required to understand competitors’ products, their strengths and weaknesses, and pricing. Competitive research is used to contrast and compare products and may involve in-depth analytical information on any industry, company, or emerging market. This, too, uses secondary and primary research.

Concept Testing. This is used to verify market acceptance of the proposed new product concept. This includes focus groups, quantitative tests, conjoint analysis, in-depth interviews, and surveys. This is an element of primary research.

Constant Feedback. This is necessary throughout the development process to test prototypes and to ensure that the product delights the customer. This may include in-the-field studies and ethnography and other primary research modalities. After launch, surveys, a toll-free telephone line, and a Web site may be used to solicit feedback and avoid in-the-field usage problems.

Product Testing. This stage is when users first come into play. Companies use trials and preference tests to verify product performance and gain necessary approvals.

Market Launch. Going to market should be properly resourced and based on a well-defined marketing launch plan. Postmarket activities may encourage feedback from end-users and practitioners to ensure that use is consistent with the plan. Customer complaints and feedback are used to plan new releases and variations. For example, a developer of automated external defibrillators changed its training modules and documentation after launch due to customer complaints.

Without research driving key stages of the innovation cycle, product success and a return on investment may be elusive. Naturally, the best strategy and product development process alone cannot make an inferior product successful. Likewise, no amount of marketing can sell a product that is already adequately served by existing processes, technologies, and products. New product failures are most often the result of inadequate market analysis and weak market research or incorrect interpretation of information learned about the market.

Research Modalities

Secondary market research is conducted early to examine market potential and to uncover economic needs. Market research of this type may be concerned with numerous issues such as market size, incidence, and prevalence; addressable markets; market definition; trends; competitive remedies or products on the market; segmentation; distribution and sales; pricing; and purchasing criteria within hospitals, clinics, departments; and group purchasing organizations. Although some of these issues may not be relevant to product development and design, they are essential later on in developing sales training, sales tools, marketing and advertising, and product positioning.

Market studies are often produced by leading market research firms (e.g., Frost & Sullivan) that speak to these matters, but, typically, such studies do not address the specifics that a company needs. Like a lamppost, these market studies shed some light, but are not enough alone to provide sufficient relevant information to make sound business decisions.

Published Resources. Secondary published resources include business trends, company profiles, competitive analyses, executive summaries, general legal research, industry reports, information research, deep Web content, market trends, marketing research reports, analysts, newswires, Web sites, databases, blogs, annual reports, etc. Deep Web—also known as invisible Web—refers to information sources that are off bounds to search engines. For example, such content includes pages that are not linked to other pages, information that is locked up in databases from which Web pages are generated in response to specific queries, or sites that otherwise limit access. Experts maintain that deep Web content is estimated at 500 times that of surface Web content.

Search engines provide lots of content, but there is no assurance that the data are reliable or up to date. Commercial-grade business intelligence and news sources such as Factiva, Dialog, and LexisNexis are more reliable. Information in these quality-controlled sources is indexed and frequently updated by hundreds of respected news and content providers worldwide. Medical device, pharmaceutical, and biotech subjects, industries, and applications are plentiful in these resources.

Fee-Based Resources. Subscription-only databases available through Factiva, Dialog, and others afford access to content that is off-limits to the world’s largest search engines. Trained information specialists have access and expertise to efficiently research, retrieve, and report on the information behind these gates.

EMBASE and Biosis are two fee-based databases that professional researchers may use in support of secondary research for the medical field. EMBASE is the bibliographic database of choice to access the international biomedical and drug literature. More than 11 million records from 1974 to the present cover more than 5000 journals published in 70 countries. Information includes human medicine (clinical and experimental), health policy and management, substance dependence and abuse, biomedical engineering and instrumentation, and more. Records are updated weekly, and the system is renowned for its rapid, reliable, and extensive coverage.

By using the right tools, such as the Incidence and Prevalence Database (IAPV), answers are obtainable to questions like: What are the trends in peripheral bypass graft surgery in the last five years? What are the costs ­associated with back pain? The data­base includes coverage from 1994 to the present.

Solucient, a proprietary information products company, part of Thomson Corp., uses data from Medicare Provider Analysis and Review (MedPAR) billing files and Medicare cost reports to examine cost as well as financial and market performance. MedPAR files allow researchers to track inpatient history and patterns and outcomes of care over time. Its list of top hospitals is available to the public on its Web site at no cost, but hospitals are charged a fee of $1100 for their scores and a full report.

(Although reimbursement strategy is beyond the scope of this article, it should be noted that a reimbursement plan should be addressed early on in new product development.)

Patient hospitalizations can be found in Solucient’s ACTracker database, a proprietary repository containing data on approximately 6 million annual discharges from more than 450 hospitals. It is used along with Medstat, a healthcare work tool that allows employers, health plans, and government agencies to gain insights into patient hospitalizations. Another free source of statistics in the healthcare industry is the National Center for Health Statistics (www.cdc.gov/nchs).

Ethnography. Outside the realm of the traditional market research toolkit, ethnography is taken from cultural anthropology. (Some consider ethnography to be closely aligned to participant-observation research, whereas others dispute it.) This much is known: ethnography is used as an alternative to conducting sit-down customer interviews.

Ethnographic research has been used for years by consumer products companies and other industries to gain deeper insights about their markets and the beliefs, motivation, and behaviors that characterize their customers. This gets to the heart of how people think, how they feel, and what they want. Ethnographic research can inform with the rich textures of real-life experiences. It is based on the notion that you can best absorb a culture by being there and doing it.

Ethnography studies provide insights into features and functionality, product preferences, and user subtleties that may not be voiced by users in more-structured environs such as via focus groups or through surveys. In this methodology, trained observers are videotaped and audiotaped in real-life circumstances. Ethnography is used as a means to realize deep insight into features and functionality. As Bill Evans of Bridge Design has said, “A major challenge facing any device firm aiming for a better product is how to listen for what customers really want in a next-generation product.”²

Consider a product for use by surgeons. Ethnographic researchers need to observe them using the product in the operating room (OR), because in-the-field use is the only place the sounds, distractions, and pressures that characterize use in an OR setting can occur. No simulation or staging area can equal the real thing.

Voice of the Customer (VOC). VOC is a primary research approach to fully understanding the customer’s total experience. It is generally conducted at the customer’s site in an intense, focused interview. Results are analyzed and turned into requirements for planning and design purposes. By focusing on VOC and linking it to engineering characteristics, the needs and perceptions of the end-user are used to guide the development of the next generation of a product. VOC is a way to start with the end-user in mind rather than having engineering drive product development, supplemented by inputs from marketing and sales.

Patent Research. Patent information is primarily used for a company’s defensive position and to keep businesses out of legal hot water. However, patent files can be used in a company’s offensive strategy, too.

Business searchers are missing key information if they ignore intellectual property (IP) databases. These are the files containing patent, trademark, and copyright information. IP files can tell a company what its competition is doing, what the value of a new technology might be, whether what its scientists and engineers have developed is marketable, and more.

Patent research can also help companies understand what new products their competitors are planning to introduce—and where. Dialog SourceOne is a worldwide document delivery service that provides copies of original patent documents (more than 40 million, including European patents). Other patent databases include Derwent, CLAIMS/US Patents, WIPO/ PCT Patents Fulltext, and Chemical Abstracts. Google now offers a patent database, but it covers U.S. patents only. Experienced patent researchers typically use various databases, knowing the capabilities and limitations of each, judiciously employing different approaches and sources to thoroughly search for patents.

Market Research. Medical product market research is also available from market research firms such as Frost & Sullivan, Marketresearch.com, IMS, Cooper Research, and others. While these firms’ reports and studies may be available only to subscribers, oftentimes chapters (or slices) of the expensive studies may be bought by individuals, saving considerable time and money since the market segments and characteristics are already studied and published. However, these canned medical market research reports may not be specific enough to be meaningful to users.

Other resources of note include Medistat—World Medical Markets Analysis, World Pharmaceutical Markets, and the Espicom Pharmaceutical and Medical Company Database. The Medistat database provides a wealth of information for each country, including background information on economics, population, and morbidity, a healthcare system overview, and statistics on hospital services and medical personnel. It also presents information about the device market in each country, including distributors, imports, production, trade statistics, and healthcare organizations.

The World Pharmaceutical Markets database and Espicom Pharmaceutical and Medical Company Database can be accessed through the Espicom link (www.espicom.com) in the Electronic Information Center menus. Medical Device Companies Analysis, Version 2.0 Comprehensive, reports on more than 75 leading medical device and equipment manufacturers. It covers all aspects of their operations, including corporate structure, mergers and acquisitions, agreements, financial performance, product portfolio, international activities, and R&D.

Conclusion

The probability of new product success correlates directly with the information that companies use to make decisions. Making intelligent, sound business decisions is a function of a company’s decision-making skills and the information at hand. Gathering information from reliable sources can reduce uncertainty and doubt about the uncontrollable inputs. Although uncertainty cannot be eliminated, in most cases useful information reduces a certain amount of risk.

Entrepreneurs can generally tolerate ambiguity, but this does not mean that ambiguity should be the substance behind decisions. Good, solid information can reduce the uncertainty and ambiguity to ensure that important decisions are made with confidence. It is best to know where and how to gather information from multiple sources, recognizing patterns and special information, and to make informed decisions based on the best available, up-to-date, and specific information that speaks to the issues.

Business success is a function of the management of technology, personnel, and information resources as well as design procedures. New product development is a series of decisions that are always made based on an evaluation of the decision maker’s alternatives, information, values, and logic at the time the decision is made.

In the case of medical device product development, which can affect the lives of millions, performing research is an essential part of the development process and, much like design, it should be systematic, monitored, and measured. Experienced researchers know not just where to search but how to search, saving time and money and uncovering relevant and specific information in a timely manner. Well-sourced information can make a substantial difference in the success or failure of any new medical device product innovation.

Richard Halpern is principal of Halpern Info Services (Franklin, MA). He can be contacted at 508/346-3225 or richard@halperninfoservices.com.

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