Thursday 13 August 2015

Medtronic's Micra Pacemaker: Game-Changer, or Business As Usual?

The Incumbent Market
Pacemakers are indicated for use in some patients with arrhythmias (irregular heart beats) where electronic pacing is helpful; for example, pacemakers are the most common treatment for bradycardia (a slow heartbeat) and over 1 million are implanted each year around the world.

Pacemakers require a skilled cardiologist to implant the device under the skin near the collar bone and then affix the leads to whichever areas of the heart need pacing. The leads are a weak feature of pacemakers as they sometimes fracture, and the risk of infection from implanting a large foreign object into the body is also substantial.

Depending on the patient's particular arrhythmia, either single- or dual-chamber pacemakers are indicated. The price of a pacemaker can run from $3,000 - $7,000, but the average price seems to be about $4,000. Assuming that average price holds around the world, the pacemaker market is worth about $4 billion per year in new device sales alone.

The Disruptor
Medtronic has developed the Micra, a vitamin pill-sized 'Transcatheter Pacing System' only 1/10th the size of a traditional device. While
Medtronic Micra TPS
much of the engineering for this device has likely occurred across international borders, the Indian market and Medtronic's long-standing presence there was a big part of the company's motivation to develop this technology. 

In a 2010 TEDMED talk Dr. Oesterle, SVP for Medicine and Technology at Medtronic, explained that, "Right now, in the United States, for our population, we have somewhere in the region of 3,000 cardiologists who are trained in implanting pacemakers." By contrast, there are only about 1,000 implanters in India, for a population of more than one billion. By providing a technology that aligns better with the skill sets of more physicians, pacemaker technology can be delivered to more patients. That's good business for Medtronic. 

The benefits of the Medtronic Micra TPS include cosmetic invisibility, implantation directly into the heart, minimally invasive and easier implantation procedure, and a lead-less form factor. The device's battery life is estimated to be nearly 10 years and, once positioned, it can be easily repositioned and retrieved if necessary. The device was awarded the CE Mark in Europe after initial findings from Medtronic's global clinical trial were positive. 

Could Medtronic's Micra TPS Succeed in The U.S.?

Medtronic could go one of two marketing routes with this device. On the one hand, they could market it disruptively as a pacemaker that performs less well on some dimensions (it's only indicated for single valve right atrial fibrillation representing about 10% of those who need a pacemaker in the U.S. per year), but better on others (less invasive, less risk of lead fractures and infections, and easier to implant), and costing less than incumbent models in the hopes of expanding the market size by targeting the needs of those who've been over-served or left out altogether by existing offerings. 

In this scenario, the 'rebar' Medtronic could target initially would be the 10% of patients indicated for single-chamber rather than dual-chamber pacemakers. Over time the technology would likely progress to the point of overtaking traditional pacemakers on most relevant dimensions and provide Medtronic, and potentially St. Jude's who is also developing a lead-less pacemaker called the Nanostim, with a huge competitive advantage as the smaller form factor becomes the normal therapy for most patients indicated for heart pacing. There would also be a very attractive increase in the volume of international sales as Medtronic offers the smaller, more easily implantable device at accessible price points around the world. I also wonder whether physicians could treat arrhythmias indicating dual-chamber pacemakers by implanting two Micra devices: One in each chamber, further increasing the volume of sales. Another potential source of significantly increased volume of sales are additional pacing applications enabled by the 'deep miniaturization' research Medtronic has been doing to build Micra. Dr. Oesterle mentions some of these applications in his TEDMED speech, and they are very exciting, including things like neurological pacing for mood disorders. 

On the other hand, Medtronic faces short-term financial pressure to recoup expenses incurred in the development of Micra that could amount to over $100 million according to one observer who estimated that Medtronic will probably charge in excess of over $10,000 per device and will seek a new, higher reimbursement code from CMS. This is business as usual and it's the kind of behavior that's been driving our healthcare costs to unsustainable levels in the U.S. 

Even if the latter scenario reflects Medtronic's pricing strategy for Micra in the U.S., the company should seriously consider selling the Micra TPS at very low prices in emerging markets like India. The promise of increasing access to life-saving pacing technologies by simplifying the implantation procedure will be squandered if the price remains an insurmountable barrier for most patients. 

Tuesday 4 August 2015

ReMotion: An $80 Prosthetic Knee

The Incumbent Market
There are an estimated 10-20 million amputees in the world with about 2 million in the U.S. alone. Nearly 190,000 amputations are performed in the U.S. per year, and over 90% of these, or about 170,000, deal with the lower limbs.

Lower extremity prosthetic limbs for Western markets range in price from $8,000 to $50,000 and will need to be replaced every 2-4 years, mostly due to degradation of the device. A good example of a high end incumbent leg prosthesis is Ottobock's C-Leg costing approximately $50,000 in the U.S.

The U.S. market alone for lower extremity prosthetic limbs could therefore include $3.5 billion per year in new amputee fittings, plus another $9 billion per year in replacement fittings assuming that 25% of the 1.8 million lower extremity amputees in the U.S. replace their prosthetic each year and that the average price of a lower limb prosthetic is $20,000. This is a total market size of approximately $12 billion per year!

The Disruptor
The additional 8 to 18 million amputees in the world, most living outside of wealthy countries, face wrenching financial, health, and social challenges due to limb loss. In India alone, there are an estimated 5.5 million people living with locomotor disabilities arising from polio, congenital
The ReMotion Knee
conditions or amputations largely due to agricultural and traffic accidents. Most of these people cannot afford Western prosthetics, so disruptive companies like the famous Jaipur Foot in northern India have risen to meet the challenge of providing suitable, safe, and affordable prosthetics for Indian patients and low income patients across the globe. In fact, Jaipur Foot is the world's largest fitter of prosthetic limbs by volume, having provided prosthetics to over 1.4 million patients since their founding in 1975.

Jaipur's original prosthetic knee joint for above knee amputees, the Polycentric Jaipur Knee, although low cost and reliable caused problems of undesirable clicking sound, rotational instability and alignment. Over 7000 of these Knees have been fitted since the product's introduction in 2008. The Jaipur Knee was named as one of the world's best inventions by Time Magazine in 2009

D-Rev has helped design Jaipur Foot's next generation above the knee prosthetic leg, the ReMotion Knee, which still retails for less than $80 and operates as a poly-centric knee with world-class performance. More than 79% of patients fitted with the knee are still wearing it, and D-Rev's rules to create world-class products, be user-obsessed, and market driven have resulted in several design improvements that help dampen sound, improve the prosthetic aesthetics, and still maintain low-cost, scalable production potential.

Could The Re-Motion Knee Succeed In the U.S.?
Jaipur and D-Rev are rightly celebrated for providing affordable high-quality prosthetics to the developing world and the need for them to do so is urgent and large. But is there also a market for the ReMotion Knee in the U.S.? Which patients, payers, and providers might welcome the opportunity to fit a $100 above the knee prosthetic that performs 'well enough' to justify the cost savings? Are there enough of them to comprise a viable market and justify the additional cost of seeking FDA approval for ReMotion? How much cost would operating in the U.S. add to the device?

There are indications of demand for more disruptive prosthetics in the U.S. and North America generally. A recent crowd-funding campaign to fund the other half of a Carleton University student's new prosthetic leg came about because, after insurance coverage, he was still left with an out-of-pocket charge of over $10,000. He is not the only one who would find it difficult to pay that bill every 2-4 years.

One non-profit organization called e-NABLE seeks to donate 3-D printed prosthetic limbs to those in need and most of their activity has been within Western markets so far. They have over 5,500 members and have received a Google award of $600,000 for their work.

How many of the approximately 170,000 lower-limb amputees in the U.S. per year would be interested in fitting themselves with a ReMotion Knee?


Addendum from Dr. Pooja Mukul, Technical Director of Paul Hamlyn International Center of Prosthetics & Orthotics at BMVSS, Jaipur:
In 2007 when Mr. D R Mehta, Founder & Chief Patron of BMVSS, was visiting San Francisco he was introduced to some of the faculty at Stanford University by Dr. Armand Neukermans. Mr. Mehta gave a presentation about the work we do at BMVSS which was greatly appreciated at Stanford. Following his visit Dr. Neukermans informed Mr.Mehta that the Stanford University was interested in collaborating with BMVSS and this led to the signing of a formal MOU between BMVSS & Stanford University. 
The first research project that was jointly undertaken was designing a Prosthetic Knee Joint. The team of Stanford students visited BMVSS and after several brainstorming sessions it was decided to base the Knee joint on the Polycentric concept. Therefore from the very outset the design was Polycentric and not monocentric as you had noted in the draft for your blog. 
The first prototype of the Polycentric Jaipur Knee was ready in August 2008. After successfully going through the laboratory tests,clinical trials were commenced.
The initial user feedback in respect to stability in stance, ease of initiation of swing, toe clearance, acceptability, compliance and durability was very positive.
As you may have seen,the Jaipur Knee featured in the Time Magazine's November 2009 issue as one of the 50 best inventions of the world for that year. 
However, on long term follow up, we did have a few mechanical failures and patients voiced some concerns. The patients disliked the clicking sound that the joint made at terminal stance, after prolonged use the threaded portions became loose resulting in sudden rotation of the prosthesis, patients living in hilly or desert terrain suggested that an optional lock would enhance their confidence while negotiating challenging terrain and they also felt that the aesthetics needed to be improved. The joint was designed to interface with the existing prosthetic componentry at BMVSS but after observing the success of the design it was felt that to permit a more widespread use of the design it should be compatible with conventional prosthetic componentry commonly used in centers around the world. The user feedback was shared with the Stanford team that made several trips to BMVSS during the project. Many design modifications were made between 2008 - 2011. 
In 2011 the students graduated and the design was passed on to D-Rev a non profit organization for further development. A formal agreement was then drawn up between BMVSS and D-Rev and we have been working together since. D-Rev rechristened the Jaipur Knee as "ReMotion Knee" after incorporating changes that addressed the problems raised by the users at BMVSS. 
In 2013 we received the Indo-US Science & Technology Forum (IUSSTF) grant to carry out design and cost optimization for mass manufacturability and India Pilot Trials for the ReMotion Knee (which was technically the Version 3 of the Jaipur Knee).
We carried out trials of 41 ReMotion Knees as part of the IUSSTF project. The feedback was passed on to D-Rev, some design modifications were carried out and a Version 4 is now in the process of being manufactured. 
We continue to use the Jaipur Knee (Version 1) and have so far fitted 7350 patients of which 1900 were in 14 countries outside India. 
We are currently working on another project with the Stanford University , in which we are developing a Terminal device for upper extremity amputees. This has all been made possible by Dr. Armand Neukermans who is an ardent supporter of BMVSS.