National Academies Press: OpenBook

New Medical Devices: Invention, Development, and Use (1988)

Chapter: Technological Innovation and Medical Devices

« Previous: Inventing Medical Devices: Five Inventors
Suggested Citation:"Technological Innovation and Medical Devices." National Academy of Engineering and Institute of Medicine. 1988. New Medical Devices: Invention, Development, and Use. Washington, DC: The National Academies Press. doi: 10.17226/1099.
×
Page 35
Suggested Citation:"Technological Innovation and Medical Devices." National Academy of Engineering and Institute of Medicine. 1988. New Medical Devices: Invention, Development, and Use. Washington, DC: The National Academies Press. doi: 10.17226/1099.
×
Page 36
Suggested Citation:"Technological Innovation and Medical Devices." National Academy of Engineering and Institute of Medicine. 1988. New Medical Devices: Invention, Development, and Use. Washington, DC: The National Academies Press. doi: 10.17226/1099.
×
Page 37
Suggested Citation:"Technological Innovation and Medical Devices." National Academy of Engineering and Institute of Medicine. 1988. New Medical Devices: Invention, Development, and Use. Washington, DC: The National Academies Press. doi: 10.17226/1099.
×
Page 38
Suggested Citation:"Technological Innovation and Medical Devices." National Academy of Engineering and Institute of Medicine. 1988. New Medical Devices: Invention, Development, and Use. Washington, DC: The National Academies Press. doi: 10.17226/1099.
×
Page 39
Suggested Citation:"Technological Innovation and Medical Devices." National Academy of Engineering and Institute of Medicine. 1988. New Medical Devices: Invention, Development, and Use. Washington, DC: The National Academies Press. doi: 10.17226/1099.
×
Page 40
Suggested Citation:"Technological Innovation and Medical Devices." National Academy of Engineering and Institute of Medicine. 1988. New Medical Devices: Invention, Development, and Use. Washington, DC: The National Academies Press. doi: 10.17226/1099.
×
Page 41
Suggested Citation:"Technological Innovation and Medical Devices." National Academy of Engineering and Institute of Medicine. 1988. New Medical Devices: Invention, Development, and Use. Washington, DC: The National Academies Press. doi: 10.17226/1099.
×
Page 42
Suggested Citation:"Technological Innovation and Medical Devices." National Academy of Engineering and Institute of Medicine. 1988. New Medical Devices: Invention, Development, and Use. Washington, DC: The National Academies Press. doi: 10.17226/1099.
×
Page 43
Suggested Citation:"Technological Innovation and Medical Devices." National Academy of Engineering and Institute of Medicine. 1988. New Medical Devices: Invention, Development, and Use. Washington, DC: The National Academies Press. doi: 10.17226/1099.
×
Page 44
Suggested Citation:"Technological Innovation and Medical Devices." National Academy of Engineering and Institute of Medicine. 1988. New Medical Devices: Invention, Development, and Use. Washington, DC: The National Academies Press. doi: 10.17226/1099.
×
Page 45
Suggested Citation:"Technological Innovation and Medical Devices." National Academy of Engineering and Institute of Medicine. 1988. New Medical Devices: Invention, Development, and Use. Washington, DC: The National Academies Press. doi: 10.17226/1099.
×
Page 46
Suggested Citation:"Technological Innovation and Medical Devices." National Academy of Engineering and Institute of Medicine. 1988. New Medical Devices: Invention, Development, and Use. Washington, DC: The National Academies Press. doi: 10.17226/1099.
×
Page 47
Suggested Citation:"Technological Innovation and Medical Devices." National Academy of Engineering and Institute of Medicine. 1988. New Medical Devices: Invention, Development, and Use. Washington, DC: The National Academies Press. doi: 10.17226/1099.
×
Page 48

Below is the uncorrected machine-read text of this chapter, intended to provide our own search engines and external engines with highly rich, chapter-representative searchable text of each book. Because it is UNCORRECTED material, please consider the following text as a useful but insufficient proxy for the authoritative book pages.

Technological Innovation and Medical Devices EDWARD B. ROBERTS About 5 years ago, Robert Levy—then the director of the National Heart, Lung, and Blood Institute and I cochaired a meeting that attempted to assess the state of knowledge about the development, dissemination, use, and acceptance of biomedical innovation. Having recently reread the proceedings of that meeting (Roberts et al., 1981), I perceive that much progress has been made during the past 5 years in our understanding of these critical aspects of medical technology. I will illuminate the process of technological innovation in the field of medical devices by posing five questions. I would prefer to provide empirical answers to these questions and to use evidence drawn entirely from experiences with medical devices to identify what matters, what works and what does not work, and what the obstacles are to achieving more effective innovation. But the field of medical devices has not been researched as carefully or as thoroughly as one would have liked. Thus, I am going to draw upon some studies that have been done on innovations outside of the medical device field, on the few works that recently have been carried out on technological innovation in the medical device field, and on my 20 years of experience in this area. WHAT IS TECHNOLOGICAL INNOVATION IN MEDICAL DEVICES? Innovation can be classified in several ways, many of which are relevant to innovation of medical devices. For example, innovations in products, manufacturing processes, and modes of practice are all 35

36 MEDICAL DEVICE INNOVATION AND HEALTH CARE important. Both invention of new devices and modification of existing devices occur. Radical innovations that introduce dramatic new ca- pabilities are important, as are incremental innovations in existing products and processes. Invention that is wholly original certainly takes place, but innovation also includes modifying, upgrading, and improving existing devices. Innovation also means adoption taking a device that someone has developed previously and applying it to a different situation. A final way to distinguish among innovations is to recognize that some are based upon the application of new knowledge from scientific research, whereas others are clear cases of engineering problem solving, in which existing knowledge or techniques are applied to newly defined problems. An overriding issue with these topologies is that our thinking about innovations in the medical field is dominated by images that come largely from the pharmaceutical industry. If most of us were asked to describe technological innovation in medical devices, we would speak about basic research that is carried out in large organizations and that generates fundamental knowledge used to create radical innovations in medical devices. Often, our managerial and policy approaches also reflect such images. Yet, my personal experience, supported by the few relevant studies on innovation, indicates that the medical device field contradicts all of these images. Instead, innovation in medical devices is usually based on engineering problem solving by individuals or small firms, is often incremental rather than radical, seldom depends on the results of long-term research in the basic sciences, and generally does not reflect the recent generation of fundamental new knowledge. It is a very different endeavor from drug innovation, indeed. Table 1 displays data gathered a number of years ago on innovations in 77 companies and in five different (all nonmedical) fields of activity (Myers and Marquis, 19691. In attempting to look at the amount of TABLE 1 Technological Change Embodied in Successful Innovations Percent Distributiona Degree of Inventiveness Little Considerable Invention required aX2 = 19.1 ; p < .001. SOURCE: Original data from Myers and Marquis (1969). Analysis from Utterback and Abernathy (1975). Stage 1 Stage 2 Stage 3 14 41 45 19 50 31 33 48 19

TEClINOLOGICAL INNOVATIOIV AND MEDICAL DEVICES TABLE 2 Degree of Functional Advance Embodied in British Medical Equipment Innovations Advance 37 Number Example First time provided to equipment user Major improvement in functionality 8 Minor improvement 10 Failure Total SOURCE: Shaw (1986). 10 34 Neonatal oxygen monitoring system Radio pill telemetry system MiniatuIization of radiography equipment Nasal airways resistance tester technological change embodied in these innovations (degree of inven- tiveness), James M. Utterback of the Massachusetts Institute of Technology (MIT) and the late William J. Abernathy of the Harvard Business School clustered the data into three stages in the evolution of technology (Utterback and Abernathy, 19751. Stage 1 was emerging new technology; stage 2 was technology that was growing in adoption and use; and stage 3 was mature technology that was widely diffused and used. Utterback and Abernathy found that the characteristics of technological innovation depended upon the stage of evolution of the technology. As depicted in Table 1, situations requiring original invention dominated stage 1 innovations only; much less invention typified innovations arising in stages 2 and 3. This suggests that an important dimension is whether the underlying technology of a particular medical device is newly emerging or not. If it is, then one should expect that a high degree of technological change will be required- possibly true invention and perhaps providing a real opportunity for basic scientific and engineering research to play an important role. If, however, a medical device is based on a technology that is well founded and widely diffused, the device innovation will likely merely involve upgrading, enhancing, and expanding current applications. In a doctoral dissertation, Shaw (1986) shed light on this issue from the perspective of a small, randomly selected set of 34 innovations of medical equipment in Great Britain. The results of this study, sum- marized in Table 2, indicated that only 10 of the 34 innovations represented the first time that a particular function was provided to the equipment user (for example, a neonatal oxygen monitoring system). Of the remaining cases of (supposedly) significant innovations in medical devices, six were market failures (for example, a nasal

38 MEDICAL DEVICE INNOVATION AND HEALTH CARE airways resistance tester) and 18 were improvements on functions that had been previously available (8 were major improvements, such as the radio pill telemetry system; 10 were minor improvements, such as the miniaturization of radiography equipment). If Shaw's findings can be applied generally, then only a minority of medical device innovations bring a new functionality to health care providers. In the same study, Shaw attempted to identify sources of key technological information that were embodied in the 34 innovations. Only 10 products were closely associated with original medical re- search. (Here, the term "associated" is used quite loosely, and includes all cases in which the innovation was developed in the course of carrying out medical research. Thus, the 10 cases were not necessarily devices that embodied recent results of original medical research.) For five innovations, clinical studies were an important source of ideas. But engineering and development were the major sources of innovative ideas for 19 products, clearly dominating the technological sources of ideas for medical device innovations. WHO BRINGS ABOUT MEDICALDEVICE INNOVATIONS? It is commonplace in the field of innovation to talk about the importance of the relationship between the manufacturer and the user. The correct and well-supported presumption is that when a potential innovator focuses on needs and is attentive to the marketplace of prospective users, he or she can acquire insight into what products ought to be developed. As a consequence, resulting innovations are more likely to be successful. One can go beyond this rather simplistic characterization, however. In many areas, including medical devices, the user is not merely a source of information about his or her needs to a manufacturer who innovates. Frequently, the user is the innovator. The innovative user not only defines a need, he or she also identifies the solution to that need. The innovative user often develops the initial innovation, places it into first clinical use, and makes copies or detailed specifications of the innovation available to other practitioners. Only later, in many cases, does a manufacturer acquire the user's innovation and begin to engage in the serious and important problems of commercial devel- opment—among them, engineering for manufacturing and for reliable field use, and service and volume scale-up. Eric van Hippel of MIT has conducted a series of studies on sources of product innovations. His first four analyses focused on innovations in scientific instrumentation: gas chromatography, nuclear magnetic resonance, ultraviolet spectrophotometry, and transmission electron

TECHNOLOGICAL INNOVATION AND MEDICAL DEVICES TABLE 3 User Domination of Instrument Innovations 39 Percent No. of No. of Category of User- User- Manufacturer- Instruments Dominated Dominated Dominated Gas chromatography Nuclear magnetic resonance Ultraviolet spectrophotometry Transmission electron microscope SOURCE: van Hippel (1976). 82 9 2 79 100 79 11 11 4 0 microscopy (von Hippel, 19761. Despite a strict definition of what constitutes domination of an innovation, von Hippel concluded that 80 to 100 percent of the key innovations in these four scientific instruments were dominated by the user (Table 31. To qualify as user dominated, von Hippel insisted that the user had to have identified the need, developed the technical solution, put the solution into practice, and made the solution available to others in the field—all before a manufacturer played any role in these activities. With the van Hippel study as a background, we can return to Shaw's recently completed study of British medical innovations (Straw, 19861. Results were similar to those observed in van Hippel's study. For half of the British medical innovations (18 of 34), a prototype was developed and produced by a user. In another third of the cases (11 of 34), the innovative idea was transferred directly from the user to the manufac- turer at the user's initiative, to satisfy the user's needs. For only 4 of 34 devices was the innovation developed by a manufacturer who had performed market research to determine the nature and magnitude of a potential need, and then had developed a product to satisfy that need. In one case, the manufacturer went forward without the benefit of market research to push a technology that the manufacturer believed was desirable. Perhaps only coinciden- tally, that device was 1 of only 6 cases of market failure among the 34 medical innovations studied by Shawl Additional information about user and manufacturer initiatives for the 34 British medical equipment innovations was gathered by Shaw but not published with his dissertation. Four users started their own companies to manufacture their innovative devices. One new company was established by a potential user who was in contact with the innovative user. In six cases, the inventor contacted existing companies and asked them to develop and manufacture the invention. In four cases, a user approached an existing company after he had identified- but before he had invented—the solution. In one case, a government

40 MEDICAL DEVICE INNOVATION AND HEALTH CARE agency took the initiative and selected a firm to develop the device. In seven cases, there was an existing long-term relationship between an active user and a company working in the same field of medicine. For only 15 percent of the devices (5 of 34) did a company take the initiative in approaching a user for assistance in product development. And in even fewer cases (4 of 34) was the project initiated and carried out within the firm, without benefit of user relationships. Another study by van Hippel and Finkelstein (1978) showed that user innovation can be encouraged or discouraged by medical equip- ment manufacturers. They demonstrated that the design of Technicon's auto-analyzer permitted nearly all of its test procedures to be developed by users, whereas DuPont's clinical analyzer had a closed design that produced dependency on DuPont's internal research and development professionals for supportive innovations. Although the specific results may be somewhat different in a more comprehensive analysis of U.S. medical device innovations, these data clearly identify the locus of innovation for medical devices. The process of medical device innovation is dominated primarily by individuals, usually in academic and clinical settings, who are involved in the development and use of new technology in their respective fields. The role of the device manufacturer tends to be supportive and secondary—not primary for most innovative medical devices. For companies that are trying to innovate in medical fields, it is critical that they relate closely to the clinical scene. I recently completed a study of all new medical companies formed in Massachusetts between the years 1970 and 1975 (Hauptman and Roberts, 1987; Roberts and Hauptman, 1986, 19874. The study focused on the companies' activities in developing and marketing new products. A major finding was that the degree of clinical contact between those companies and, particu- larly, teaching hospitals was strongly correlated with the degree of technological innovation embodied in the products that the companies developed. It is nearly impossible for a biomedical company to be successful if it does not retain close ties to a clinical environment. And yet, courting academicians as potential sources of new ideas is not an easy pathway to innovation. To illustrate this point, I rely on studies I performed a number of years ago using MIT faculty members in three departments physics, electrical engineering, and mechanical engineering. Table 4 depicts what faculty members did with ideas that, in their judgment, had the greatest commercial potential (Roberts and Peters, 19811. Only about one-third took any strong steps to transfer their ideas to commercial manufacturers. Similar studies by researchers in MIT's two largest research laboratories replicated these findings (Peters and Roberts, 19691.

TECHNOLOGICAL INNOVATION AIDED MEDICAL DEVICES TABLE 4 Academicians' Exploitation of Their Commercially Oriented Ideas Academic Ideas 41 Degree of Commercial Exploitation No. Percent None 32 . 47 Weak 10 15 Strong 26 38 Totals 68 100 SOURCE: Roberts and Peters (1981). More recently, I repeated the study with 75 full-time physicians at two major medical centers in the Boston area—one directly linked to a major medical school and the other a Veterans Administration hospital. More than half of the physicians (44 of 75) claimed to have come up with ideas that, if developed, would be worthwhile. Yet, less than half of those who had ideas had attempted to transfer them to commercial manufacturers. Of the 44 physicians who had ideas, 19 engaged in discussions with outside companies; 9 of them even entered into what they regarded as negotiations: 4 developed patent applica- tions, and 1 formed a new company to try to commercialize the technological innovation. Academics at universities or in clinical settings may have productive ideas, but they infrequently exploit those ideas. An important secondary finding in these studies was the lack of statistical correlation between the perceived potential benefits or medical importance of the ideas and the degree to which they are pushed toward commercial development. Routine academic ideas with little anticipated impact were as likely to get transferred to commercial firms as were exceptional ideas with excellent commercial prospects. Transfer depended more on the situation and the individual who developed the idea than on the quality of the idea itself. This was true both for MIT faculty members and for clinical and academic physicians. Results of these studies permit us to conclude that inventive users are the principal driving force behind most medical device innovations, either as developers and initial implementers or in close association with commercial developers. Unfortunately, the data also demonstrate that a large number (perhaps most) of the potentially valuable ideas from users lie dormant in academia, in large part because academicians do not know about commercial technology transfer. This situation needs to be carefully examined in light of the increasingly favorable relationships between universities and industry. Such ties may permit

42 MEDICAL DEVICE INNOVATION AND HEALTH CARE a larger fraction of academic ideas to move toward commercial development. WHICH COMPANIES CONTRIBUTE TO MEDICAL DEVICE INNOVATIONS? An earlier study of innovation in nonmedical fields may provide some insight into the characteristics of firms that innovate in the field of medical devices. The information contained in Table 5 indicates that as new technologies emerge (stage 1), a number of small firms (each selling less than $10 million worth of products) dominate corporate sources of innovations. However, larger companies (those selling more than $100 million worth of products) account for most of the innovations during growth and development stages (stages 2 and 3) of technologies. There is general misunderstanding in the United States and abroad about the relative roles of different-sized firms in the innovation process. Much of the talk about small companies being more innovative than large ones should be replaced by more accurate statements about how small companies are likely to be innovative at very early stages in the development of new technologies and how large companies are likely to be primary sources of innovation at later stages in the development of new technologies. Large companies that are particu- larly innovative have a special competitive edge for dominating later stages in a technology's evolution. A similar phenomenon is likely to be true for innovation in the area of medical devices. Here, too, important differences in the timing and TABLE 5 Firm Size and Successful Innovation as a Function of Stage of Technology - Stage of Evolution of Technology Stage 1 Size of Firms (Sales $ x 106) Unclassifieda <10 10-100 >100 NOTE: A total of 77 firms were studied (X2 = 11.2; p < .01). aUnclassified firms are private companies that refused to provide sales data; they are all assumed to be doing less than $10 million in sales. SOURCE: Original data from Myers and Marquis (1969). Analysis from Utterback and Abernathy (1975). No. Stages 2 and 3 Percent No. 8 o (?) 2 8 15 60 Percent 32 o 18 12 23 34 12 31 16

TECHNOLOGICAL INNOVATION kD MEDICAL DEVICES TABLE 6 Technology Development Milestones in Diagnostic Ultrasound 43 Year Milestone Developer Market Introduction Physionics 1963 1969 1972 1973 1975 1976 1977 1983 SOURCE: Friar (1986). Commercial 2-D scanning Mech. real time Electronically switched real time Stored gray scale Electronic focus Microprocess controls Digital scan converter Computed sonography U. of Colo. U. of Colo. Dutch medical researchers Rohe Scientific Diagnostic Electronics Searle Ultrasound Searle Ultrasound Acuson Magnaflux Organon Teknika Rohe Scientific Diagnostic Electronics Searle Ultrasound Searle Ultrasound Acuson type of a firm's innovations will depend on the size of the firm. These distinctions are critical for health care policymakers, since about 50 percent of U.S. medical device manufacturers have fewer than 20 employees. In a doctoral dissertation recently completed by John Friar (1986), eight major developmental milestones in the field of diagnostic ultrasound were identified. Table 6 lists these milestones; all occurred between 1963 and 1983 and were derived from careful assessment by experts. In only two cases did a large company (Searle) initially develop a key technological change. The three other cases in which companies were identified as innovators are intriguing: Each of the companies- Rohe Scientific, Diagnostic Electronics, and Acuson were founded approximately at the time of development of the milestone that they subsequently introduced to the market. Even when we focus on market introduction rather than technical development, the small firm remains the innovator during the early stages of a new technology. Physionics was a new firm that licensed ultrasound technology developed by the University of Colorado. Magnaflux was also a new firm that licensed an important development by the University of Colorado. Organon Teknika, a major corporation, licensed a development that came from a university in the Netherlands. As described in the preceding paragraph, Rohe Scientific, Diagnostic Electronics, and Acuson were all new firms that introduced their own new technologies. These limited data suggest that small, innovative firms and university or hospital employees trying to satisfy their own needs as clinical or diagnostic users are the primary contributors to milestone develop-

44 MEDICAL DEVICE INNOVATION AND HEALTH CARE meets in the medical device field. Personal experience and related research in other countries (Teubal et al., 1976) also support this conclusion. HOW DO FDA REGULATIONS AFFECT MEDICAL DEVICE INNOVATION? The importance of small firms to innovation in medical devices highlights concerns about the differential impact of Food and Drug Administration (FDA) regulations on large and small firms. A recent study~of innovations in x-ray technology (Birnbaum, 1984) showed that increased FDA regulations led to decreased innovation of x-ray devices, especially by small firms. A 1986 study of innovation in contact lenses by the Office of Technology Assessment also expressed concern that small firms would be disproportionately affected by FDA regulations, particularly in the emerging technologies of soft and gas- permeable contact lenses (U.S. Congress, Office of Technology As- sessment, 19871. All this, however, does not mean that the FDA acts irresponsibly in its regulatory capacity. My recent study of medically oriented firms in Massachusetts indicated that the risk associated with use of these firms' new medical products—assessed by an independent medical panel was significantly positively correlated with the degree of in- novation embodied in a technology or in its application (Hauptman and Roberts, 19871. The more new technology that was embedded in a product, the greater was the product's assessed risk. This relationship held true for the first, second, and third new products that these companies introduced to the market, as well as for all of a company's products, taken together. The degree of assessed medical risk was less for new products classified as medical supplies than for new medical devices and pharmaceuticals; this relationship confirms logical expec- tations. It is somewhat comforting to the skeptics among us to observe that the impact of FDA regulation is significantly correlated with the independent assessment of risk from new products: The greater the perceived medical risk, the more FDA intervention affected the companies involved in developing and marketing the product. I believe this is the right direction for FDA activity, but there is an important negative side effect. The introduction of the Medical Devices Amendment in 1976 dramatically decreased the rate of new product introduction by young biomedical firms in Massachusetts (Hauptman and Roberts, 1987), and, although lacking empirical evidence, I suspect this also was true for young medical firms throughout the United

TECHNOLOGICAL INNOVATION AND MEDICAL DEVICES 45 States. This may explain the negative correlation that exists for poorly financed biomedical firms between the extent to which a young firm is technologically innovative and the economic success of the company. Only in the medical field have I observed this relationship; in all other studies since 1964 there was a direct positive relationship between the degree of technological advance and the success of the firm. In the medical field, if the company is not sufficiently financed to overcome direct and indirect regulatory costs (particularly delays in generating product revenues), then being technologically innovative may be a curse rather than a benefit. This is a serious problem that should be addressed by both policymakers and managers. It may be possible to speed up FDA review processes for smaller firms that suffer because of the costs needed to sustain themselves until market approval is obtained. This could be achieved by (1) preferential attention to, but not different standards for, applications from small companies; (2) expansion of FDA review staff; and (3) greater flexibility in accepting experimental data, especially overseas clinical trials. WHAT IS THE ROLE OF THE LARGER COMPANY IN MEDICAL DEVICE INNOVATION? A comprehensive study of the ultrasound industry provides a basis for information about expensive new medical devices (Friar, 19861. Of the 11 largest companies in the ultrasound device field, 9 entered the field by acquiring an innovator that had developed and commercialized some ultrasound technology. In four cases, the large company gained additional competitive technologies by further acquisitions. The only Japanese company on the list, Toshiba, entered the ultrasound field on its own and did not acquire outside technology as a major element of advancing its market position, a situation that contradicts our usual stereotype of Japanese firms as technologically acquisitive. In addition, Hewlett Packard entered the field based on its own technology but acquired Ekoline to strengthen its technological position. If the larger company's role in medical device innovation is to acquire other firms (and, thereby, technological innovations), perhaps we should focus our attention exclusively on the activities of smaller firms. But large companies clearly dominate the medical device industry in sales. Most companies in the ultrasound industry are quite small, with 67 percent of them projected to have less than $5 million in sales in 1986. Only 20 percent of the firms are projected to sell more than $10 million worth of ultrasound equipment. The four largest companies are estimated to have 53 percent of the total U.S. market. Large sales

46 MEDICAL DEVICE INNOVATION AND HEALTH CARE are therefore concentrated in large companies that are not the original sources of most device innovations and that have usually acquired their technological base through licensing another firm's innovation or by acquiring that firm. My own entrepreneurial experience in areas ranging from clinical diagnostics to medical information systems reaffirms conclusions drawn from the ultrasound example: Young, small firms dominate the initial stages of major innovations, and large companies advance principally through later acquisition of innovating small firms. Large and small firms in the medical device industry play different roles: The small firm is frequently the early-stage innovator and is most jeopardized by the regulatory process. The large firm can afford the expense of the regulatory process, but is less likely to be affected because it is less often a key innovator. The patterns described here suggest that we need to support potentially synergistic relationships between large and small companies in the medical device industry. Potential ties that need to be examined and, perhaps, fostered range from sponsored research to venture capital to acquisition and alliances, and have been increasing rapidly in biotechnology and medical device fields in recent years. A recent study of 34 British medical equipment manufacturers showed a significant amount of collaboration between users and manufacturers and between small and large firms. A total of 25 manufacturers were involved in joint prototype testing and product evaluation and marketing, 19 manufacturers were involved in joint prototype development and product marketing, and 13 manufac- turers were involved in joint prototype specification and marketing. I believe that the potential benefits to companies and to society of various alliances between large and small firms are particularly prom- ising in the field of medical devices. The evidence cited demonstrates that the primary roles of firms differ greatly as a function of their size. Younger, smaller firms offer technological innovations and display the entrepreneurial drive and commitment needed to bring a new medical device to initial use and early marketing. Large companies offer different resources: money, manufacturing capability, well-organized channels of distribution and field service, knowledge and experience for dealing with regulatory issues, and the opportunity to integrate multiple areas of technology. Large companies also contribute the potential for well-organized incremental technological improvements during growth and maturation of new medical technologies. Explicit policy attention may be justified to strengthen beneficial relationships between large and small medical device firms. Areas for review might include the following: (1) the extent and criteria for awarding funds from medical devices, such as the National Institutes

TECHNOLOGICAL INNOVATION AND MEDICAL DEVICES 47 of Health's Small Business Innovation Research program; (2) tax treatment of expenses incurred by firms in appropriate collaborative research and development endeavors; and (3) federal funding of innovation stages beyond research, such as product development and research on market applications. Programs such as these exist in several countries that are trying to foster competitive industrial inno- vation. Additionally, strengthening ties between universities and large and small companies may enhance the innovation of medical devices alla, thereby, benefit society. REFERENCES Birnbaum, P. H. 1984. The choice of strategic alternatives under increasing regulation in high technology companies. Academy of Management Journal 27(3):489-510. Friar, J. H. 1986. Technology Strategy: The Case of the Diagnostic Ultrasound Industry. Ph.D. dissertation. Sloan School of Management, Massachusetts Institute of Tech- nology, Cambridge. Hauptman, O., and E. B. Roberts. 1987. FDA regulation of product risk and its impact upon young biomedical firms. Journal of Product Innovation Management 4(2):138- 148. Myers, S., and D. G. Marquis. 1969. Successful Industrial Innovations. NSF 69-17. Washington, D.C.: National Science Foundation. Peters, D., and E. B. Roberts. 1969. Unutilized ideas in university laboratories. Academy of Management Journal 12(2): 179-191. Roberts, E. B., and O. Hauptman. 1986. The process of technology transfer to the new biomedical and pharmaceutical firm. Research Policy 15(3):107-119. Roberts, E. B., and O. Hauptman. 1987. The financing threshold effect on success and failure of biomedical and pharmaceutical start-ups. Management Science 33(3):381- 394. Roberts, E. B., and D. Peters. 1981. Commercial innovation from university faculty. Research Policy 10(2):108-126. Roberts, E. B., R. Levy, S. N. Finkelstein, J. Moskowitz, and E. I. Sondik, eds. 1981. Biomedical Innovation. Cambridge: MIT Press. Shaw, B. F. 1986. The Role of the Interaction between the Manufacturer and the User in the Technological Innovation Process. Ph.D. dissertation. University of Sussex, Sussex, United Kingdom. Teubal, M., N. Arnon, and M. Trachtenberg. 1976. Performance in innovation in the Israeli electronics industry: A case study of biomedical electronics instrumentation. Research Policy 5(4):35~379. U.S. Congress, Office of Technology Assessment. 1987. Case Study No. 31: Contact Lenses. Washington, D.C. Utterback, J. M., and W. J. Abernathy. 1975. A dynamic model of product and process innovation. Omega 3(6):639~56. van Hippel, E. 1976. The dominant role of users in the scientific instrument innovation process. Research Policy 5(3):212-239. von Hippel, E., and S. Finkelstein. 1978. Product designs which encourage or discourage related innovations by users: An analysis of innovation in automatic clinical chemistry analyzers. Working Paper. Sloan School of Management, Massachusetts Institute of Technology, Cambridge. (July).

Next: Part 2: Current Trends »
New Medical Devices: Invention, Development, and Use Get This Book
×
Buy Paperback | $55.00
MyNAP members save 10% online.
Login or Register to save!
Download Free PDF

In the past 50 years the development of a wide range of medical devices has improved the quality of people's lives and revolutionized the prevention and treatment of disease, but it also has contributed to the high cost of health care. Issues that shape the invention of new medical devices and affect their introduction and use are explored in this volume. The authors examine the role of federal support, the decision-making process behind private funding, the need for reforms in regulation and product liability, the effects of the medical payment system, and other critical topics relevant to the development of new devices.

  1. ×

    Welcome to OpenBook!

    You're looking at OpenBook, NAP.edu's online reading room since 1999. Based on feedback from you, our users, we've made some improvements that make it easier than ever to read thousands of publications on our website.

    Do you want to take a quick tour of the OpenBook's features?

    No Thanks Take a Tour »
  2. ×

    Show this book's table of contents, where you can jump to any chapter by name.

    « Back Next »
  3. ×

    ...or use these buttons to go back to the previous chapter or skip to the next one.

    « Back Next »
  4. ×

    Jump up to the previous page or down to the next one. Also, you can type in a page number and press Enter to go directly to that page in the book.

    « Back Next »
  5. ×

    To search the entire text of this book, type in your search term here and press Enter.

    « Back Next »
  6. ×

    Share a link to this book page on your preferred social network or via email.

    « Back Next »
  7. ×

    View our suggested citation for this chapter.

    « Back Next »
  8. ×

    Ready to take your reading offline? Click here to buy this book in print or download it as a free PDF, if available.

    « Back Next »
Stay Connected!