Monthly Archives: April 2014

Medical Device Leadership In an Uncertain Time: A Manifesto

Payments / reimbursement under the Affordable Care Act . . .

Purchasing consortia for hospitals and other health care providers . . .

Lower profit margins than in the previous decade . . .

An uncertain future in both FDA and foreign regulations . . .

Minimal venture capital interest in this industry . . .

How will medical device leaders choose which research directions to follow,

which product lines to invest in?



The 1990s and 2000s are rather widely acknowledged to have been the heyday of finance.

Milton Friedman’s philosophy that increasing the financial wealth of shareholders was the sole justifiable principle for a corporation now governed all economic policy, seeped even into U.S. Supreme Court decisions.

The compensation of investment bankers was (and remains) the envy of all. The free-wheeling lifestyle, “masters of the universe” power, invulnerable occupational security and exciting posture on the forefront of cutting edge economic growth left many in awe and envy. Finance came to dominate all discussions of industrial and economic policy. There was practically no sector untouched by the growth of the financial industry – none that exceeded its enormous growth.

Then came the crash(es) of the last 15 years, and the vulnerability of our bets on the financial industry as the leader of growth was exposed. Losses were great – and left bare how much of the “growth” had been paper growth, not raw development.

This may be the time to capitalize on products and service as our key economic benchmark. This may be an opportunity to seize an advantage in the effectiveness, the documented outcomes of fewer, but better, products and services.


Yes, it is difficult, risky and expensive to demonstrate effectiveness of medical devices, biologics and drugs. There are likely to be fewer (financial) winners, and the rewards may be smaller (on paper; quarterly) than in the previous decade; so, indeed, there may be fewer entrants into the race.

On the other hand, might we recapture an earlier (really, not that long ago) criterion of success: building a firm with lasting power, grounded in the security of demonstrated effectiveness, successful outcomes that could be counted on by health care providers for years to come? They are often the ones who persevere. They are the heroes, not only of the industry, but of the economy.


Let’s think of “economic” over “finance.” Etymologically, “economy” means management of the household. “Finance” comes from a French origin meaning “payment/ending of a debt.” Economic policy – managing the good of our national well-being – should be the overriding category and priority, with financial success a subset – not the other way around. In that world medical devices companies can flourish. That is the opportunity we now have.