Medical Device Link.

Medmarc's Quinley:
Litigation lessons.

This summer’s product liability trial against Merck’s Cox-2 inhibitor Vioxx in Angleton, TX, resulted in a $253 million award, $229 million of which was for punitive damages. Although it is easy in retrospect to second-guess Merck’s defense strategy, the case still offers instructive lessons on risk management and claim defense for medtech manufacturers that—on a smaller scale—grapple with similar product liability issues.

In this article, Kevin M. Quinley and Cindy Khin examine some of the lessons that medtech executives can take from Merck’s experience. Quinley is senior vice president and Khin is assistant vice president for insurance operations at Medmarc Insurance Group (Chantilly, VA). [ More ]

In an estimated $1.2 billion deal, GE Healthcare (Chalfont St. Giles, United Kingdom) plans to acquire information technology (IT) provider IDX Systems Corp. (Burlington, VT). GE predicts the merger will "create a leading healthcare IT vendor, offering one of the most comprehensive suites of clinical, imaging, and administrative information systems on the market."

"GE and IDX have a shared vision on how to accelerate the adoption of electronic health records across the globe," says Joe Hogan, president and CEO of GE Healthcare. "We are extremely excited about joining with IDX and believe that our combined offerings are in line with where healthcare is headed and match the needs of our customers." [ More ]

Private equity firm Ovum Ventures (Melbourne, FL) has committed to raising $125 million to invest in early- and seed-stage medtech companies in Minnesota and the surrounding areas. The firm reached this agreement with venture capital organization Alley Ventures LLC (St. Louis Park, MN) in early October. For its part, Alley Ventures will identify investment opportunities within Minnesota’s medical device and life sciences industries and provide Ovum with the first chance at cutting deals with the emerging companies.

"Alley Ventures will play a key role going forward in generating sound deal flow, and helping small and emerging companies access seed-stage venture capital in Minnesota and the surrounding region," says Don Gerhardt, president and CEO of the nonprofit healthcare trade association Medical Alley/MNBIO.

Medical Alley created Alley Ventures in 2003 to address the lack of funding for emerging medical technology, biosciences, and life sciences companies in Minnesota. [ More ]

The National Cancer Institute (NCI; Bethesda, MD) in early October launched a major component of its $144.3 million, five-year project for nanotechnology in cancer research by awarding first-year grants totaling $26.3 million to universities across

the country to help establish seven Centers of Cancer Nanotechnology Excellence (CCNEs). These centers will develop nanotechnology devices to help treat, understand, and monitor cancer.

"In what we believe will be a paradigm shift for cancer research, unprecedented numbers of multidisciplinary teams of basic and clinical researchers at world-class institutions are networking their research together to focus on the key cancer nanotech opportunities," says Anna Barker, PhD, NCI deputy director. "With the advent of the CCNEs, we are particularly looking forward to new nanotech-based therapeutic delivery systems that could enhance the efficacy and tolerability of cancer treatments." [ More ]

GHX's Mahoney: Fewer links in the supply chain.

Consolidation in the electronic healthcare marketplace continued in October with the announcement that Global Healthcare Exchange LLC (GHX; Westminster, CO) will acquire Neoforma Inc. (San Jose, CA) in an estimated $200 million deal.

Describing the acquisition as an "opportunity to continue improving efficiencies and lowering costs in the healthcare supply chain," Michael Mahoney, CEO of GHX, says, "By combining these two organizations, GHX can offer new services to a broader range of both buyer and seller participants, and enable greater efficiencies across the supply chain." [ More ]

Due to an aging U.S. population combined with increased physician acceptance and patient preference for home-based medical treatment, the home healthcare market will experience sustainable top-line growth in the 10 to 15% range in the coming years.

According to a new report issued by Cochran, Caronia Securities LLC (Chicago), Home Healthcare: Fragmented Market Positioned for Growth, the entire home healthcare services sector achieved estimated revenues of more than $40 billion in 2003. Dominating the market were home nursing services (between $24 billion and $27 billion), followed by home respiratory therapy (between $5 billion and $8 billion), and home infusion therapy (about $5 billion). Services related to home medical equipment accounted for about $2.5 billion, or 6% of the sector’s total. [ More ]

The results of a survey released in October by the American Hospital Association (Chicago) reveals that although hospitals are eager to embrace modern information technology (IT) systems, implementation varies. Level of actual adoption fluctuates as a function of facility size, financial resources, teaching status, location, and whether the facility is a member of a hospital system.

Respondents to the survey, Forward Momentum: Hospital Use of Information Technology, saw cost as the greatest barrier to IT implementation. Interoperability concerns were also cited as a major impediment to greater hospitalwide IT implementation, as administrators feared installing equipment and systems that could not exchange information. [ More ]

AdvaMed’s Ubl: A risky gamble.

According to the survey, more than 70% of the responding physicians agreed with the statement that “Hospitals should not limit physicians’ choice of medical devices and offer a financial benefit to those physicians just to save the hospital money.”

Commenting on the survey, AdvaMed president Stephen Ubl said, “These measures have strong opposition from doctors . . . who are clearly concerned about losing their choice of treatment options. Gainsharing could undermine the use of advanced medical technologies, reduce innovation, and compromise the physician–patient relationship. It could be a risky gamble with patient health and technological innovation—and physicians know it.” [ More ]

Medtronic Inc. (Minneapolis) was expected to make a big splash at this month’s Transcatheter Cardiovascular Therapeutics (TCT) scientific symposium in Washington, DC, where the company presented results from its Endeavor III U.S. clinical trial. Favorable results were expected to help speed U.S. market entry for Endeavor, the company’s first drug-eluting coronary stent.

Instead, results presented at TCT indicated that Endeavor had failed to meet Medtronic’s primary goal, which was to demonstrate in-segment late loss that was "noninferior" to the performance of the Cypher drug-eluting stent by Cordis Corp. (Miami Lakes, FL), a Johnson & Johnson company.

Late loss refers to the difference in the width of a vessel immediately following stenting versus that found six to nine months later. In the study presented at TCT, the Endeavor stent missed its goal by just 0.01 mm.

"We narrowly missed," admitted Scott Ward, president of Medtronic Vascular (Santa Rosa, CA). But Ward also noted that in some other categories of the study, such as the need for poststenting lesion revascularization and adverse cardiac events (including the need for repeat procedures, heart attack, and death), Endeavor was clinically equivalent to Cypher. However, analysts noted that the stent also exhibited a clinically acceptable but higher rate of restenosis than Cypher.

Medtronic submitted the first module of Endeavor's premarket approval application to FDA in early October. The company said that the stent is still on track for U.S. market entry in 2007. [ More ]