Medical Device Link.

Originally Published MX January/February 2006

CONTRIBUTORS

Now that 2005 has come to a close, medtech manufacturers are turning their attention to the future to see what 2006 might hold for the ever-evolving device industry. In "The Medtech Marketplace in 2006" (page 32), MX explores the hot issues and innovations that will drive medtech sectors this year and beyond. Contributors in this issue share additional insights for the new year.

Finance

Ginsburg

In light of a federal accounting rule change that goes into effect this year, medical device executives, if they haven't already, can expect to see a shift in their compensation packages. Fair-market-value stock options, long a staple in executive compensation programs, are no longer as attractive on a company's financial statement as they once were, leading to a gradual shift toward other vehicles as a means of putting equity into executives' hands. In "Compensating for Change", Ted Ginsburg explores the implications this accounting change has for medical device companies and their leaders. Ginsburg, a consulting principal with Top Five Data Services Inc. (Fremont, CA), can be reached at tginsburg@top5.com. Top Five annually conducts the Medic Executive Compensation Survey, which provides comprehensive compensation and benefits data for more than 100 U.S.-based executive positions in the medical equipment and device industry.

Market Analysis

Jackson

Stevens

Wound care in the form of dry bandages and dressings has been around since ancient times. Yet despite this longevity—and the fact that wound care currently costs the U.S. healthcare system billions every year—unmet clinical and commercial needs persist. To meet the current market demand for more-effective healing, reduced complications, and shortened hospital stays, a new category of treatment is emerging: active wound care products. In "The Future of Wound Care", Stuart Jackson and Jeff Stevens outline the current demand for—and the challenges facing—active wound care products, some of which use bioactive compounds to facilitate the body's ability to heal. Jackson is vice president and head of the Chicago office of L.E.K. Consulting, a global strategy consulting firm that employs more than 650 professional staff across a network of 16 offices in the major cities of Europe, North America, and Asia-Pacific. He also leads the firm's international medical device practice and has more than 20 years of consulting experience working with leading companies in this sector. Jackson can be reached at s.jackson@lek.com. Stevens is a partner based in Chicago and is a senior member of L.E.K.'s medical device practice. He can be reached at j.stevens@lek.com.

Information Technologies

Lokas

Despite the tendency of medical device manufacturers to treat their business goals and regulatory compliance as separate entities, the two walk hand in hand. In recognizing the need to align these two components, many medtech companies are beginning to explore the creation of a manufacturing compliance platform, an automated strategy designed to meet the specific regulatory and information needs of life sciences manufacturers. In "The Business of Compliance", Karim Lokas discusses how medtech manufacturers can implement such a system to mitigate regulatory risk exposure as well as improve key performance metrics. For the last three years, Lokas has led the life sciences team at Camstar Systems Inc. (Charlotte, NC), where he provides leadership in the definition and design of software solutions and strategic services for the medical device industry. He works with leading life sciences manufacturers in developing global manufacturing and quality systems strategies and solutions. Lokas focuses on the application of information technology for FDA-regulated manufacturers in order to streamline operations management and integrate production quality systems. He can be reached at 704/227-6641 or via e-mail at klokas@camstar.com.

Copyright ©2006 MX