Employing Clinical Pathway Impact Analysis™ to drive efficacy at launch.
While large medical device corporations have long looked to startups for new technologies and devices, there are additional, innovative benefits woven into the fabric of these nimble firms. Startups that survive long enough to deliver commercial assets must first survive a form of natural selection. A similar process can benefit any new device development project.
At each stage of organizational progression, from seed funding to A round, through validation, and on to commercialization, startups must demonstrate clear risk reduction of the venture to prospective investors.
Medical device startups are inherently risky…and expensive. One early stage investor recently said to me that he can invest in 10 app startups for the cost of investing in one medical device company, and spread his risk accordingly. The Center for Venture Research recently reported only 17% of startups are successful at raising capital, yet since the Great Recession, 80% of startups I’ve had the pleasure of working with have successfully secured equity financing.
Why the variance? It comes down to scrubbing away risk; embracing and calculating the variables that are independent of the innovation, yet imperative to the commercial viability of the technology and the company itself. Long before the engineering would begin, we were using the various tools of Health Technology Assessments (HTAs) to de-risk the entire endeavor.
The best definition I’ve found to describe early Health Technology Assessments is, “All methods used to inform industry and other stakeholders about the potential value of new medical products in development, including methods to quantify and manage uncertainty.”* Core to managing uncertainty, to the point of securing the trust (and capital!) of equity investors, is the use of Multi-Criteria Decision Analysis, including the development of a thorough SWOT, headroom analysis, and with disruptive technologies, Dynamic Parallel Targeting®. Yet, even these disciplined assessments can fall short.
Here’s an example. A few years ago, a device startup I was associated with conducted extensively detailed Multi-Criteria Decision Analysis, central to its strategic plan. Years of development were suddenly at risk when CMS cut reimbursement for the technology by 64%. Thankfully, because the device was classified as a piece of Durable Medical Equipment, that is rented only when the patient is in need, we were able to pull the rental model from the patients through to the DME suppliers. This lowered the level of capital DME suppliers had historically been required to tie up in inventory while enabling the startup to depreciate the cost of its rental asset over the estimated service life of the device, delivering an exceptional ROI. These factors proved fortuitous, but it was the discipline of our early assessments, and the insights these assessments derived, that enabled a rapid pivot that was crucial for the company’s survival.
Here at REV.1 Engineering, we’ve taken these early tools for managing risk to the next level, incorporating our proprietary Clinical Pathway Impact Analysis™. In addition to our traditional de-risking of your technology, we model and validate your technology through the entire continuum of care, including, but not limited to:
- Will the technology meet the demands of healthcare economics at the projected time of launch?
- Does the party that pays for the product receive the benefits? Is this aligned?
- What potential impact does the device have on patient flow?
- What potential impact does the device have on constrained nurses’ time?
- How does the device impact clinical handoffs throughout the delivery system?
- Does the product deliver adequate QALY (quality-adjusted life years) to justify the investment?
- Can the device survive in either a fee-for-service and/or value-based reimbursement environment?
These are just a handful of the variables we process through our approach. Doing so enables our clients to get a handle on the multi-dimensional risk factors that can impact both clinical, and business, efficacy at launch.
* Source: Ijzerman MJ, et. al., Emerging use of early health technology assessment in medical product development: A scoping review of the literature. PharmacoEconomics (2017) 35: 727-740.