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Critical Success Factors for a Medical Device Company

Critical Success Factors for a Medical Device Company



Outline of critieria for success as a medical device company

Outline of critieria for success as a medical device company



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    Critical Success Factors for a Medical Device Company Critical Success Factors for a Medical Device Company Presentation Transcript

    • Critical Success Factors
      • For A Medical Device Company
    • Critical Success Factors
      • Product idea
      • Business plan
      • Funding
      • Personal factors
      • People
      • Product development
      • FDA approval
      • Reimbursement
      • Product champions
      • Financial performance
      • Free “stuff”
      • Business protection
      • Stark law
    • Business Plan
      • Explains business vision. How you envision the company in 3-5 years.
      • Need to understand market. Product need, market size, competition, technology application and differentiation.
      • Business plan should address all functional areas and fit them all together. Include financial plan-P/L, cash flow, balance sheet.
      • Understand the risks and how to manage them.
      • Enables review and evaluation of concept.
      • Update strategy to reflect changing conditions. Adapt and be creative.
      • .
    • Funding
      • The best source of funding is $ not spent unnecessarily. Manage the cash.
      • Idea –sweat equity/angel funding
      • Product development and marketing-venture capital/government grants
      • Company growth-venture capital and foreign market IPO
      • Investor exit strategy-IPO or sale of company
      • Mature product-R&D and acquisitions
    • Personal Factors
      • Emotional intelligence
      • Family support
      • Leadership skills/make tough decisions
      • Functional, few negative distractions
      • Value relationships/ maintain network
      • Determination
      • Personal ethics
      • Ability to communicate
      • Ability to execute/project management
    • People
      • Need for domain experience
      • Product champion/scientist
      • Medical advisory board
      • Board of directors
        • Advisors
        • Corporate governance
      • Product development/ engineering
      • Process development/FDA approval/quality
      • Sales and marketing
      • Clinical
      • Funding/financial
      • Legal-patent, regulatory, corporate
    • Product Development
      • Engineering
      • Clinical trials/PMA
      • Subsequent changes
        • 510k process
        • Letters to file
    • FDA Approval
      • Europe vs. USA
      • Product approval-510k process
      • Manufacturing process approval
        • June 15, 2006 update by FDA
      • Quality control process approval
      • Marketing restrictions--off-label use
    • Product Champions
      • Doctors, doctors, doctors
      • Hospital
      • Other medical professionals
      • Nurses
      • Professional papers
      • Speeches
      • Conferences
      • News releases
    • Need for Reimbursement
      • Hospitals need to be paid
      • Doctors need to be paid
      • Medical device company needs to be paid
      • Increasingly tight reimbursement policies
      • Best options from an investors perspective:
        • Product category is already approved for reimbursement
        • Breakthrough must offer such compelling clinical benefits and cost reduction that the reimbursement process will be as smooth as possible.
    • Reimbursement in Business Plan
      • Begin planning for reimbursement strategy at the earliest stages of the company formation; it should be a fundamental part of the business plan.
      • Consider the data requirements for supporting a reimbursement submission when formulating clinical trials. The data to support reimbursement may be significantly different than the clinical data.
      • Work with an expert on reimbursement strategy:
        • Regulations are extremely complex
        • Rules and winning strategies change frequently
        • Must stay abreast of best practices
        • Focus is on economics of a procedure, not just clinical outcome.
    • Reimbursement Cycle
      • Detailed understanding of process is needed.
      • DRG’s/CPT’s established to provide for reimbursement
      • Can device company provide guidance on DRG and CPT to be used?
      Payment For Medical Device CPT for Doctor’s Services DRG For Hospital
    • What Are DRG’s/CPT’s?
      • DRG
        • Diagnosis Related Group
        • Developed by CMS
        • CMS=Centers for Medicare & Medicaid Services
        • Reevaluation/new rules currently underway-October 2006
      • CPT Code
        • Current Procedural Terminology
        • Developed by American Medical Association
        • Requests for changes presented to committee
      • Payments based on what is “normal, customary and reasonable” as determined by CMS or insurance provider.
      • Frequently also used by private insurers for reimbursement.
    • Financial Performance
      • Cash flow. Cash is king!!
      • Market penetration = revenue growth
      • Salespersons – feet on the street to grow revenue
      • Revenue growth vs. income-sometime contradictory!!
      • R&D expense-how much is being invested and in what?
    • “ Free” Stuff
      • Web sites and news releases of competitors
      • Analyst reports on industry and competitors
      • Web sites of regulatory agencies and trade associations
        • FDA=www.fda.gov
        • CMS=www.cms.hhs.gov
        • AMA=www.ama-assn.org
        • AdvaMed=www.advamed.com
    • Business Protection
      • Patents
      • Trade secrets
      • Trademarks
      • Noncompete agreements
      • Nondisclosure agreements
      • Code of ethics
    • Sales, Marketing and Clinical
      • Sales vs. clinical
      • Is marketing necessary?
      • Who does a doctor want to talk to?
      • Relationship building
    • Stark Laws
      • Address consulting and professional relationships between doctors and companies.
      • Example of risk-U.S. Department of Justice subpoenas issued to orthopedic companies.
      Hospital Doctor Device Company
    • Stark Law’s Basic Prohibitions
      • A physician cannot:
      • Make a referral
      • To an entity
      • For the furnishing of “designated health services”
      • The may be payable by Medicare or Medicaid (or insurance companies in some states)
      • If the physician (or the immediate family member of the physician)
      • Has a direct or indirect financial relationship with the entity
      • Unless an exception to the Stark laws applies
    • Ten Perceptions That Can Kill A Company
      • You have a great idea and raising money will not be a problem.
      • You can get it done quickly and at a low cost.
      • Dilution is a bad thing.
      • You have the best talent on the street.
      • You do not need patent protection, the trade secrets are significant.
      • “ Build it and they will come.” Success in the market is totally based upon technology superiority.
      • It is a low risk and expedited regulatory pathway.
      • Scientific founders should continue as CEO forever.
      • Management and boards are strategically aligned.
      • Venture capitalists like risk and have unlimited funding.
    • Success