But for early-stage healthtech startups, that’s changing. Today, joining Rock Health, Blueprint Health, Healthbox and a handful of others is the New York Digital Health Accelerator.

Formed by a partnership between the New York eHealth Collaborative and the Partnership for New York City Fund, the accelerator is geared towards early and growth-stage health startups building products and services in care coordination, patient engagement, health analytics and messaging.

The accelerator offers a nine-month program in which chosen startups receive up to $300K in funding, access to clinical and technical feedback from provider organization, integration into a statewide network of Electronic Health Record (EHR) data and mentorship from a group of healthcare entrepreneurs, investors and executives.

When we covered the launch of MedStartr in July, the appeal of the heath-focused, Kickstarter-style crowdfunding platform seemed to be its ability to act as a screening ground for investors interested in the space.

Not only that, but by incorporating partner programs, the startup could allow doctors, CIOs or health executives to not only gain a channel for deal flow, but a venue to test products and reward those that meet certain benchmarks. For example, if a company were to reach previously-agreed-upon benchmarks, like a certain amount of feedback or funding, the investors or provider could reward them by funding their first pilot study.

Why is this important? Because, beyond the challenge of finding access to and attracting health-focused or health-savvy investors, early-stage digital health startups often struggle with getting their products or devices in front of doctors, health providers and hospitals. What’s more, legacy vendor architecture, poor incentive structures, lengthy sales cycles and a health system focused on expediency and not patient outcome means there’s plenty of friction facing startups in today’s medical landscape.

To address these problems, the partnership is not only investing more capital in its startups than the majority of health accelerators, it believes it is the first to offer companies access to “senior-level healthcare providers” who are actually “committed to their success.” That sounds like BS, so what does that mean, exactly?

The accelerator has partnered with 20+ providers (represented by more than 50 senior executives at those organizations) and a group of health investors, who collectively reviewed the 250+ applications and ultimately made the decision on which companies were chosen to participate in the program. In exchange for participating in the selection process, the organizations, executives and investors then commit to working with the chosen companies for the duration of the 9-month program.

Dave Chase, a contributor to TechCrunch and the co-founder of Avado (which was selected as one of the accelerator’s startups) told us that, while the companies don’t guarantee that they will purchase from the startups, the program matches the providers who have a particular need with the companies that provide solutions. That makes it easier for them to find supporting capital and a network of customers and resources to help get their products off the ground. The participating investors, hospitals and clinics (like Mount Sinai, New York Hospital Queens and New York-Presbyterian) want to work with these startups and help test their products.

In fact, according to Chase, the investors who were party to the selection process said that the process alone made it worth the entire program, as they heard exactly what the senior decision makers at these huge organizations and providers actually want to buy (or not buy) from young companies. Providers get to dictate the capital injection (or reward) structure, while startups and investors get to see first hand what they need — or what part of their infrastructure is most broken.

For example, Aidin, one of the companies that recently won Morgenthaler and Health 2.0′s event to find “the most fundable digital health companies” and a member of the accelerator’s first class, was seeded with $100K at the start of the program and will receive the remaining $200K after three months if it is able to hit its partnering hospital’s projected targets.

It may sound like a system that puts way too much power in the hands of hospitals and clinics, but the truth is that these are the players that digital health startups struggle to get access to and are, in the end, the ones who become the buyers or customers of startups. They get to help dictate which companies are chosen, but also basically ensure the initial success of those startups.

On top of that, the NY Digital Health Accelerator is also setting fairly ambitious goals for itself (and its companies) in terms of outside/VC funding over the course of the program. Representatives from the accelerator said that it expects its startups to attract upwards of $150 to $200 million post-program over the next five years. If they continue with 8-company batches over that time, that’s as much as $5 million-per-company after graduation, which would put it on par or ahead of even the most well-known incubators.

To that point, for its debut, the accelerator selected eight companies as part of its inaugural batch, which were chosen from more than 250 applications. Again, for committing to opening offices in New York State, the companies are each given up to $300K (far more than 90 percent of accelerators, healthtech or otherwise) as well as access to mentorship, feedback, and direct access to the tech platform that connects EHRs across New York State, called the Statewide Health Information Network of New York (SHIN-NY).

The investment capital comes from a syndicate that includes Aetna, Milestone Venture Partners, Janssen Healthcare, Safeguard Scientifics and UnitedHealth Group, to name a few.

So, without further ado, here’s a brief look at the NY Digital Health Accelerator’s inaugural class of eight:

KnowMyMeds’ AdhereTx is web-based, interoperable software that supports team-based medication management and reconciliation for high-risk patients at the point of care. KnowMyMeds enables healthcare practitioners to perform clinically validated, cost-effective medication review for high-risk patients, including “dual eligibles” and the chronically ill, to reduce their drug-related hospitalizations and re-admissions.

Aidin is a web-based referral platform for hospitals discharging patients to post-acute care. Aidin collects hard data about how well post-acute providers perform and makes it easy for hospital staff to present that information to patients when they are choosing their post-acute provider – helping patients choose better providers for better outcomes. [Check out TC's coverage of Aidin here.]

Avado, a TechCrunch Disrupt finalist, allows clinicians and patients to securely communicate, track, and manage health information. The startup centralizes data from EHRs and makes it usable for all stakeholders. To attract providers, Avado exceeds typical “Meaningful Use” requirements for patient engagement, while also addressing requirements for medical homes and accountable models. [Check out TC's coverage here.]

CipherHealth helps hospitals avoid government penalties by reducing preventable re-admissions, improving outcomes, better coordinating care, and creating a positive patient experience. CipherHealth reaches out over the phone, through tablets, via email, text, or the web, better engaging patients in their care and building stronger relationships between patients and providers.

Cureatr is on a mission to improve how healthcare providers communicate and coordinate patient care. The startup’s lightweight, HIPAA-secure group messaging system integrates with existing directories, scheduling and paging systems, making it easy to use while coordinating care within or between organizations.

MedCPU delivers accurate, realtime clinical care advice through its next-gen “Advisor Button” technology. The startup captures the complete clinical picture from clinicians’ free-text notes, dictations and structured documentation entered into any EMR, and analyzes it against a growing library of best-practice content, generating realtime prompts for best-care consideration.

Remedy Systems leverages the power of mobile to lower the cost and improve the quality of healthcare via its flexible care coordination platform that enables physicians and nurses to concentrate on delivering the highest quality of care possible while fostering engagement from patients and family/friends.

SpectraMD maximizes the value of data across the continuum of care with business intelligence solutions. Their FOCUS™ Actionable Analytics platform enables stakeholders in hospitals and ambulatory care settings to improve outcomes, increase revenues, succeed in quality-based initiatives including “Reducing Preventable Readmissions” and leverage analytics for the “Health Home” initiative.

Perhaps AdvaMed needs more members representing early stage, proto-companies including those that are trying to commercialize products for the under-served and under-developed markets.  Perhaps the organizers could offer a discounted membership fee and have a session where nascent ventures could demonstrate their gee-whiz technologies to get feedback and learn how to turn their gadgets into products.  I think they would find a decent pool of applicants. I have noted lots of interesting prototype devices and proto-ventures coming out of universities, advised a few in my volunteer mentoring at MIT, and have I written about a handful of global health diagnostics companies (e.g., “Thinking Outside the Box”  and “TB Bx:  Getting There”).  Recently, I heard about the Center (or Consortium) for Affordable Medical Technology (CAMTech) that has as one objectives deploying affordable technologies in the low and middle income countries through licensing and new ventures, and it may generate future AdvaMed members.  Interestingly, CAMTech evolved from a program for which I had tried volunteer three years ago, the Global Health Initiative of the Center for the Integration of Medicine and Innovative Technology (CIMIT) which was started by Kris Olson, a clinician and pioneer of affordable medtech, who is CAMTech’s medical director.

One company I noted that could benefit from and contribute to an association with its industry peers is Gradian Health Systems (GHS).  GHS was started in 2010, is based in New York City, and is funded, possibly solely, by a grant from the Simons Foundation, a philanthropy that funds basic science and mathematics research (Simons).  GHS’s lead product is a “universal anesthesia machine” (UAM) that was designed by the company’s scientific founder, Paul Fenton, is fully-engineered and manufactured, and has earned a CE mark (a European Union medical device approval process based on a safety demonstration and intended use; see Medcitynews for a comparison to the USFDA approval process [Medcitynews article ]).  To learn more about the commercialization of the UAM, I watched a December 2011 TED (Technology, Entertainment, Design) talk by Erica Frenkel, GHS’s Director of Business Strategy, (UAM talk) which has had about 250,000 views (congrats!).  Unfortunately, Ms. Frenkel spoke mostly about the need for safe anesthesia (“35 million annual surgeries without safe anesthesia”), some about the machine’s unique features (has a backup battery and can use room oxygen), a bit about its current use (some number are in 13 hospitals, donated or sold?), and nothing about affordability/pricing, distribution, partnering, funding, revenue projection, or other bits of a business strategy.

I expect that the management of GHS has worked out a commercialization strategy since the CEO, a consultant, and one board member have medical device company start-up experience (GHS Team).  To me, such a strategy is key for convincing funders, whether grantors or investors, that GHS can effectively address the need.  Whatever plan exists though, it apparently needs additional details since the company is advertising for a Director of Product Management (GHS Blog) among whose responsibilities are:  develop a marketing plan; liaise with the manufacturer for production, R and D, and introduction; find distribution partners in target countries; and create training programs for use and maintenance along with eleven others.

I am clearly an amateur in the medical device field and not knowledgeable about surgical anesthesia, but my quick search indicates that there is some research that GHS can draw on to build its marketing plan.  A study by Hodges et al. gathered data that defined the problems in anesthesia delivery in Uganda (Hodges et al. 2007) and Jochberger et al. gathered similar data for Zambia (Jochberger et al. 2008).  I also found that the World Ananesthia Society (WAS) is dedicated to supporting anesthesiology in the developing world including through training, so may be helpful in assessing UAM adoption and use.  GHS could also contract with consultants for specific parts of its plan to get a handle on pricing, adoption rate, and customer preferences and ability to pay, but the consultants would need to understand emerging world markets which may be a rarity.  While GHS as done an amazing job of building and testing its UAM, it still needs to leap over the commercialization valley-of-death.  Perhaps it needs a consultant to find a consultant?

Source: http://www.buildingbetterhealthcare.co.uk/news/article_page/Shakeup_of_EU_medical_device_regulations_shocks_industry/81250 

Shake-up of EU medical device regulations shocks industry

Medical Devices | Market Information | Regulatory |

The European Commission has outlined controversial plans to overhaul the current regulatory system for the approval of medical devices

Industry leaders have hit out at the European Commission’s plans to overhaul the regulatory system for medical devices, claiming the proposals will ‘fundamentally change the way that products are brought to market without having a positive impact on patient safety’.

The comments come just days after the EU published the details of its intention to revise the current regulatory frameworks for medical devices, which were last altered in the 1990s. The move comes in the wake of the PiP breast implant scandal and concerns over metal-on-metal hip replacement products.

The existing regulatory framework has demonstrated its merits, but has also come under harsh criticism

But, despite MedTech industry representatives widely welcoming a review of the current system for awarding CE mark approval for products being sold in Europe and Turkey, they have been heavily critical of some of the plans laid out in the 194-page draft directive from Brussels.

Mike Kreuzer, executive director of technical and regulatory affairs for the trade body, the Association for British Healthcare Industries (ABHI), told BBH: “The medical device industry has long called for the overhaul of the medical device directives. We set out our position in our evidence to the science and technology committee earlier this year and we have worked with policymakers in Europe and the UK throughout the consultation process.

“Recently a number of high-profile events have shaken public confidence in the system and it is crucial that both industry and policy makers begin rebuilding this trust by improving the system and ensuring that issues such as the PiP scandal never happen again.

Recently a number of high-profile events have shaken public confidence in the system and it is crucial that both industry and policy makers begin rebuilding this trust by improving the system and ensuring that issues such as the PiP scandal never happen again

“At the same time as tightening up the system and improving issues such as transparency and vigilance, policymakers must also make sure that patients are able to access innovative new treatments at the appropriate time. Creating a system that causes unnecessary delays in products coming into the market will harm patients by limiting access to new treatments.

“The new procedure will fundamentally change the way that products are brought to market without having a positive impact on patient safety.”

The criticism mainly concerns the proposed new powers of scrutiny that will be given to regulators, enabling authorities to take a second look at individual assessments of products and to make their views known before a device is placed on the market.

The concerns are shared by the pan-European industry trade body, Eucomed. It said in a statement this week that the scrutiny procedure would ‘ultimately harm patients and negatively impact European governments and industry’.

In an internal market with 32 participating countries and subject to constant technological and scientific progress, substantial divergences in the interpretation and application of the rules have emerged, thus undermining the main objectives of the directives, i.e. the safety of medical devices and their free movement within the internal market

The changes affect both the current directive on active implantable medical devices and the directive on medical devices, which cover a huge spectrum of products. The current system divides products into four classes of risk: Class I is low-risk things such as sticking plasters and corrective glasses; Class IIa covers medium to low-risk items such as dental filling material and tracheal tubes; Class IIb is for medium to high-risk devices such as X-ray machines and bone plates and screws; and Class III is for high-risk instruments such as pacemakers and implantable defibrillators.

At present devices are subjected to a conformity assessment, which for medium and high-risk items involves an independent third party, known as a Notified Body. In the wake of the PiP scandal, the spotlight fell on these organisations, with criticism that they were operating to different standards across Europe and that their decisions and actions were not being properly scrutinised.

The EU proposal states: “The existing regulatory framework has demonstrated its merits, but has also come under harsh criticism, in particular after the French health authorities found that a French manufacturer, Poly Implant Prothèse (PiP), had for several years apparently used industrial silicone instead of medical-grade silicone for the manufacture of breast implants contrary to the approval issued by the notified body, causing harm to thousands of women around the world.

A robust, transparent and sustainable regulatory framework should be put in place that is ‘fit for purpose’. This framework should be supportive of innovation and the competitiveness of the medical device industry

“In an internal market with 32 participating countries and subject to constant technological and scientific progress, substantial divergences in the interpretation and application of the rules have emerged, thus undermining the main objectives of the directives, i.e. the safety of medical devices and their free movement within the internal market. Moreover, regulatory gaps or uncertainties exist with regard to certain products (e.g. products manufactured utilising non-viable human tissues or cells; implantable or other invasive products for cosmetic purposes. “This revision aims to overcome these flaws and gaps and to further strengthen patient safety. A robust, transparent and sustainable regulatory framework should be put in place that is ‘fit for purpose’. This framework should be supportive of innovation and the competitiveness of the medical device industry and should allow rapid and cost-efficient market access for innovative medical devices to the benefit of patients and healthcare professionals.”

The main changes proposed to the current system are:

• Wider, clearer scope extended to include, for example, implants for aesthetic purposes and clarified as regards to genetic tests
• Stronger supervision of Notified Bodies by national authorities
• More powers for assessment bodies to ensure thorough testing and regular checks on manufacturers, including unannounced factory inspections
• Clearer rights and responsibilities for manufacturers, importers and distributors, which would also apply to diagnostic services and internet sales
• An extended European database on medical devices with Eudamed providing comprehensive information on products available on the EU market. Non-confidential data will also be publicly available
• Better traceability of medical devices throughout the supply chain, enabling a swift and effective response to safety problems (e.g. recalls)
• Stricter requirements for clinical evidence to support assessments of medical devices
• Updated classification rules that devide medical devices into four different risk categories and health and safety requirements, including new labelling rules, to keep pace with technological and scientific progress
• Better co-ordination between national surveillance authorities, with the European Commission providing scientific, technical and logistic support
• Existing international guidelines to be incorporated into EU law

The new procedure will fundamentally change the way that products are brought to market without having a positive impact on patient safety

The proposal is adopted alongside a second document covering revisions in vitro diagnostic devices, such as blood tests.

Commenting on the wider impact of the proposals, Kreuzer said: “ABHI welcomes many of the changes, such as stricter controls and monitoring of Notified Bodies, increased co-ordination on vigilance, and the establishment of a comprehensive registration database accessible by Governments and patients. These measures will help make the system more transparent and will improve the overall safety of patients in the UK.”

The proposals will now have to pass through the formal EU legislative procedure, with agreement needed between the European Parliament and the Council of Ministers. Once adopted, they will replace the existing directives.

Click here to read the full EU proposal.

• EUROPEAN COMMISSION
• Association of British Healthcare Industries (ABHI)
• Medicines and Healthcare products Regulatory Agency
• Eucomed

Related articles

• Dutch medical device consulting firm opens U.S. base in Cambridge (bostonherald.com)
• FINALLY – New rules to end secrecy over safety of medical implants – Telegraph (earlsview.com)
• Medical Devices Vulnerable to Hacking Need Oversight – Businessweek (earlsview.com)
• Top 10 Changes to U.S. FDA Medical Device Registrations and Listings (prweb.com)
• Medical devices eu directives, guidance documents, ce marking process and iso certification programs (slideshare.net)
• European Commission Proposes Major Overhaul of EU Device Legislation (virtual-strategy.com)
• Corporate Whistle Blower Center Launches A National Initiative Focused On Getting Medical Device & Pharmaceutical Insiders To Cash In–If They Possess Proof Of Wrongdoing (prweb.com)
• Realistic Quality Solutions Announces Expanded International Focus (prweb.com)
• Pediatric Medical Device Idea Campaign Now Online To Stimulate Early Stage Innovation (kauffman.org)
• Peoria starts incubator to attract medical-device makers ()

1.    Make full use of the exhibition website

Filling in your company and product information on the trade show organisers’ website may seem like a no-brainer, but it never ceases to amaze me how many exhibitors overlook this  free and vital resource.  The exhibition site will be visited by buyers, who will be searching by product category (not company name, unless they already know you) in order to find what they are looking for. Some sites, such as the one for MEDICA (the world’s largest medical technology trade fair) will also allow you to post company news on their site for free, and then tweet this to all their followers, giving your news a huge audience.

2.    Get a professionally written press release

Unless you have in-house resource with the requisite skills and experience, it is generally better to outsource this to a PR and marketing professional.  He/she will know how to get your message across and who to send the release to.     But don’t forget to upload it to the news section of your website!

3.    Advertise in the trade show directory or show daily

You will usually be included in the directory as part of your exhibiting fee, but there is always the option to pay for an enhanced listing. Given that this book will be referred to by everyone visiting the show, often at great length (there’s lots of hanging around at exhibitions, after all!) making your company stand out with a listing that allows extra company and product information to be added, could make it the best value advert you ever take out.   

4.    Make your promotional material accessible

It may be nice to have attractive-looking brochures to display and hand out but many of these will  end up in the bin as people can only carry so much paper around the halls without getting a hernia.  Putting the content on CD Roms, or even better, memory sticks, can be far more effective. If you include your press release, product catalogue, images, and all your company information, it will be useful and informative for all the delegates and you’ll make the journalists’ lives easy which will increase the chance of coverage.

5.    Look into speaking opportunities at the show

Having a speaker on the conference programme is a great profile booster. Check out the topic streams well in advance – and find out if speaker opportunities are free or paid (they can be very expensive).  Assuming there’s a ‘fit’ and you have a good speaker on your team, investigate the options for a speaking slot or workshop.  

6.    Maximise the social networking opportunities

Most event organisers are social media savvy these days so there should be plenty of opportunities to connect with delegates, speakers and other exhibitors before, during and after the event.  Assuming you are up to speed on social media, here are a few ideas:

•    LinkedIn – if there’s a group, join it and monitor/participate in discussion.  Use your profile/company page to tell people you’re going to the event
•    Facebook – like the page and keep an eye on who is saying what; comment on posts that catch your eye
•    Twitter – follow them and monitor the hashtag if there is one – or start one yourself.  Retweet the tweets that interest you and engage with people that look interesting

7.    Don’t forget to tell your customers you’re going to the event

Your key objective will be to meet new customers but industry events are also a good time to catch up with existing customers.  They’ll be comforted to see that you’re there and may help evangelise about your company.  If you issue a regular e-newsletter, remember to tell readers that you’re attending x or y event.  If you don’t, include it in an email.

Its personal – In Easter of 1998 I was very nearly killed in a car accident driving from Auckland to Mt Maunganui in NZ’s upper North Island. The upper right quadrant of my face got clean ripped off my head and my right eye was pushed back about 6mm into my eye socket. I subsequently spent the next 12 months in & out of hospital. During that year I had 4 operations. That is 4 physical procedures, from 4 different physicians, all of whom never had the opportunity to learn & test themselves on those procedures before confronted with the real thing. Would I look like Brad Pitt if SIMTICS has been around in 1998? Um, that would be a resounding no, but I am sure I would be more George Clooney like if those physicians had learnt their trade via online cognitive simulations

Stay tuned…

Explore where the world’s most positive, meaningful innovations are hiding.  Engage with global entrepreneurs, designers, and executives to strike new partnerships that will alter the way you learn and live… create and innovate… invest and lead. Get the inside stories of what makes Boston and Massachusetts the home to so many dreamers, drivers, and doers…

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The substance is known as APR-246 and has now been tested on humans in a phase I/II study, which was conducted on 22 patients with advanced blood or prostate cancer. Some of the patients came from the Haematology Centre at the Karolinska University Hospital in, Stockholm, where the studys lead investigator, consultant Dr Sören Lehmann is based. The remainder of the patients were from other clinics in Gothenburg, Lund, Uppsala and Örebro.

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Together with the companies in the Swiss medical technology industry and institutional partners, the intend is to develop the World Medtech Forum Lucerne into the most important meeting point for the international medical technology industry. The aim is to delight domestic and international visitors with the trade fair, congress and networking events while establishing the World Medtech Forum Lucerne as an indispensable platform for the medical technology industry.

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Like this: Today, we live in a world where more than one billion people are unable to afford (or do not have access to) adequate medical services. Viewed in juxtaposition with the intelligent device/computer you’re reading this from, this fact is unsettling. So, Watsi, is trying to do something about it — by tackling that outsized problem on a smaller and more approachable scale: The individual.

The newly-launched startup (which was first covered by my former colleague Devin Coldewey for ABC after some buzz on Hacker News) offers anyone and everyone the ability to fund low-cost, high-impact treatment for those who lack access to necessary care.

Drawing on the recent explosion of crowdfunding, Watsi is applying a familiar model to global healthcare. The startup wants donors (i.e. anyone, as the minimum allowable donation is $5) to be able to make a direct personal connection with their beneficiaries in developing countries. In other words, it’s trying to put individual faces on a statistic. It does this by presenting profiles of those who are sick and describing what kind of care they need and the cost of offering that care.

These profiles, or cases, include pictures and synopses provided by the startup’s health care partners in the developing world. For example, take Cheru, whose case appears on Watsi’s homepage. Cheru’s case offers his picture, where he’s from (Ethiopia), who his medical partners are, a description of what treatment he needs and the cost — and a donation button that lets you donate via PayPal (whose fees are included in the cost of treatment).

Watsi’s first batch of cases went up last Friday and has since added a handful more (20-year-old Tilahun needs surgery to correct a rheumatic heart, for example) — 17 cases in all are listed on the site and 15 have already been funded, with over $11K being donated just last weekend.

In its literature, Watsi makes reference to the “high-impact, low-cost” donations can make, which, given the nature of some of the treatment needed (heart surgery), may feel a bit disingenuous. But Watsi founder Chase Adam says that the startup is fighting high costs by working with medical providers and doctors, who are donating their time, equipment, or materials, helping to keep overhead low, and because the procedures (and medical bills) just don’t have the same flat cost they would in the U.S.

Of course, while it’s easy to get wrapped up in the humanitarian vision, the donation model (of which Watsi is one of many to use) has long been taken advantage of by scammers. You often see them pop up after disasters to hoodwink people who are trying to donate to disaster relief. It’s pretty sick, but it happens all the time. It’s also hard not to be reminded of the famed Nigerian Scams.

Obviously, donors want to be sure that the people appearing in Watsi’s cases are real and that their money, even if $5, is going to that person and not a hacker. This is why, as Devin points out, sites like Charity Navigator and GiveWell exist.

Naturally, the founder has been spending a lot of time thinking about transparency. Right now, all cases are verified by Watsi and multiple third-party organizations, like Partners in Health, Givewell, CNN, ABC and HBO. Visitors can also click on the person’s “Medical Partner” or sponsor, which opens a lightbox with further info on the partner, though clearly Watsi will have to go further. (Adam also has plans to add a map, financials, photos, data, etc. to the list.)

The founder says that he wants to stay dedicated to being 100 percent transparent about where the money goes and has said on its website that it will make its tax return available for download on the site as soon as it files one with the IRS. In the meantime, the founder posted a Google Doc on Watsi’s FAQ page that keeps track of the patients, donations, who approved the patient profile, Medical Partners, and so on.

Watsi’s team, which beyond Adam is composed of five former Peace Corps Volunteers and an international doctor, is currently working on the site part-time and, even so, don’t seem to have any immediate plans to take on additional funding. Right now, they want to keep the design and UI simple, and focus on accountability, transparency and bringing in more cases.

The startup has also been approved as a 501(c)(3) organization (non-profit) in California, which means that donations will be tax-deductible, another move in the right direction. That said, there’s a lot of work left to do to ensure transparency and to ensure potential users that it can live off the donation model — or support itself from alternatives. Perhaps that could be monthly donation subscriptions, or recurring donations, or moving Watsi to become part of corporate social responsibility programs, or establish a type of adopt-a-patient program for businesses.

There are options, and Watsi is hardly the only company that’s trying to do good by way of crowdfunding, Kiva being the largest and most familiar name that comes to mind. (Or there’s the recently-beta-launched MedStartr (a young Kickstarter for health projects.) Watsi has its own staffers who work at Kiva, and it can build on the headway it and similar companies have made in the space, or in particulars, like due diligence.

Watsi has the ability to do a lot of good and really help people in need — incrementally at first, and potentially at scale down the road. So far, Watsi seems to be playing a lot of the right cards, but it faces a tough course as it expands. Healthcare is a difficult space to play in even if it is a fundamental human right, because, while we may complain about the U.S.’ crappy system, it’s a walk in the park compared to many third-world countries. In fact, according to the WHO, in 2010, 79 countries devoted less than 10 percent of government expenditures to healthcare.

More on Watsi at home here.

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Product Description

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Date: 18/09/2012

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More recently, as was reported last week in our local medtech e-newsletter (MassDevice article 1), JnJ’s CEO, Alex Gorsky, described the company’s global market aims in an investor call and said that JnJ will help governments in developing countries build health care systems based on access and affordability, unlike the US market with its emphasis on high-tech, high-cost treatments:  “… they [the governments] are building their healthcare systems in the developing markets, in not just replicating what’s been done in the developed markets, but looking for ways to expand access and, frankly, also to expand and accelerate their access to some of the new technologies in a cost effective way.”  Gorsky also said that the company’s strategy includes building R and D centers in BRIC countries and acquiring BRIC companies.

Other big medical device companies are in the same camp.  A year ago, Omar Ishrak, the new CEO of Medtronic, the world’s largest “pure play” medical device maker, told shareholders that:  “The biggest long term opportunity will be to meet the needs of billions of people who have no access to healthcare at all.”  (MassDevice article 2)  He also specifically mentioned the world’s growing middle class, but his statement and upbringing in Bangladesh imply an awareness of the lower income market’s potential.  Boston Scientific, our local medtech major, is now struggling to reverse its fortunes and stated in its 2011 shareholders’ letter it is investing heavily to increase sales in India and China through physician training programs, new plants, and improved distribution (Boston Scientific letter).  Covidien, a $10 billion medical device and supply company based in Ireland and Massachusetts, has as one of its corporate mantras, “To remain a global leader in our industry, Covidien much take responsibility for making healthcare more affordable and available.”  (Covidien annual report).  The company opened its new R and D facility in China today and its head said:  “By collaborating closely with local medical experts who use our products, we can tailor devices to meet the demands of China and other Emerging Markets” (Covidien release).  To me, these statements indicate the mechtech biggies are serious about developing products that are appropriate in terms of use and price for the BRIC/ROW counties as a counterbalance to their declining sales and profits in the US and Europe.

But what about interest in BRIC/ROW markets by the mid- and small-sized medtechs, which, like their biotech counterparts, are often the source of new products and need to be ahead of the majors on market trends for partnerships and possible acquisition?  The conventional wisdom seems to be that “going global” is too complicated for most smaller companies.  A panel of big company CEOs at a recent forum noted the challenges of achieving a presence, distribution, and compliance and appearing to be too risky to potential acquirers (MassDevice article 3).  I have a different view as I wrote in a recent posting (“New and Improved!”).  I sided with the authors of a PriceWaterhouseCooper report on medtech companies operating in India who concluded that innovation, not ignorance, was needed for companies to be successful.  Some of the report’s recommendations were appropriate to large companies (like building plants and distribution systems) but most could be managed by small companies:

• understand the market and buyers’ needs and concerns, especially the middle- and lower-income out-of-pocket buyers;
• redesign existing products to simplify procedures and decrease accessory cost;
• design new products for affordability and value, not just low price (more focus on life-saving and less on life-enhancing) and partner with local universities or firms for R and D;
• emphasize and deliver good service not only sales;
• decrease the use of distributors and increase direct, in-person sales to maximize interaction with customers;
• recognize and prepare for infrastructure limitations in communications and distribution; and
• to be competitive encourage continuous improvement in products, service, and pricing (always good advice).

To these, I added:

• reach out to NGOs or other groups that are delivering health care to understand the environment better;
• utilize the services, knowledge, and resources of international economic development groups like the IFC/World Bank (see IFC Medtech Discussion), UK’s DFID (DFID Trials Program), and US’s USAID; and
• look for successful operational models in used by technology-based companies in similar countries.

To date, however, the smaller medtech players, except for the   diagnostics companies (e.g., Chembio, Cooperative Diagnostics, Diagnostics for All, and Daktari), have largely ignored the potential of developing products specifically for the BRIC and ROW countries.  My sense is that, if entering these markets poses too big a hill, at least they should be adapting their products and trying to license them to the major companies.  I guess I need to talk with my medtech colleagues to figure out if I’m all wet or if it is time for them to boldly go.

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