Maybe you’ve heard the name Joshua Makower? According to a recent story out of Minneapolis, he’s a medical doctor with an MBA from Columbia University and an engineering degree from the Massachusetts Institute of Technology who has founded — and successfully spun off — three med-tech companies, most recently Acclarent Inc., which was sold to Johnson & Johnson for $785 million last year. In the news feature, entitled Entrepreneur says med-tech is facing fight for its life, Mr. Makower speaks to …the challenges facing med-tech, which include increased taxes to fund health care reform, greater regulatory scrutiny of new products and the way they are paid for, and a dearth of venture capital funding to develop new technologies.
You’ve heard all that before, no doubt. But there is one implication to it all that had not occurred to me. Namely, that the people who make big bets on future medical device blockbusters may be walking away to find safer havens. Here’s how Mr. Makower puts it: With all these challenges, it’s no wonder that venture capital funding for medical devices dropped to $2.5 billion last year, down from $3.4 billion in 2008. “The game-changers [for new devices] are the ones the venture capitalists are the most scared of funding,” he said.
But in the absence or diminishing flow of game-changing devices, medical device manufacturers can and should examine game-changing processes. For example, as much as regulatory changes may add a drag on an industry, they can provide opportunity for competitive advantage as well. How? Any manufacturer, by being among the first to adopt and adapt to coming mandates like Unique Device Identification, can gain share over others less prepared to meet the coming requirement. Sometimes it isn’t so much the need for a high risk winning product but a winning supply chain strategy.
You can read the news piece featuring Mr. Makower here.