How to Monetize Your Idea the 1st Time and Lower Costs

AHVAP 2016AHVAP 2016
How to Monetize Your Idea
The 1st Time!
Commercializing Helpful Innovation Versus Launching Me-To Medical Supplies

CONFIDENTIAL & COPYRIGHT PROTECTED
DISCLAIMER: This presentation contains proprietary copy written content
Every hospital CEO, today is scrambling to drive cost out of system.
Presentation has a bias toward Patient Centered Collaboration in all phases of Product Commercialization, via:
#1. Embracing helpful innovation that delivers unparalleled safety, quality, service and innovation
#2. Developing a “FAST LANE” for vetting FDA approved products that claim to truly make a difference in patients lives
#3. Understanding Supplies, Growth Solutions and Emerging Technologies and manage differently

Battle Scars

Objectives
Monetizing your Idea the 1st time!
 Voice of Customer (early and often)
 Economics
 Incorporate “Acceleration of Vetting”
 Lowering Costs

Voice of Customer (VOC)
 Who's your customer in the Lifecycle Development Process?
• Why not partner early?
Life Science

VOC Drives EVERYTHING
There is a penalty for not hearing customers
 $1 Oversight will cost $1Million (at market launch)
 Hercules discovery

V.O.C SHOULD NEVER BE AN AFTER THOUGHT
Product Lifecycle Management (PLM) Even Now Connects to CRM

AFTER FDA APPROVAL, V.O.C.

What Is Health Economics?
Health economics aims to understand the behavior of individuals, health care providers, public
private organizations, and governments in decision-making.

Healthcare Black Holes

Cost of Ignoring Economics:

Example of Ignoring Economics

Economic Toolkit: Avoiding Healthcare Black-Hole’s
1. Actions will have unintended consequences
What red light cameras are being used in hospitals today?
2. People respond to incentives
Herman is capitating payment for 1,500 per level so what do you think will happen?
3. In a world of scarcity, there are no free lunches
Every minute of time in OR, has an opportunity cost
4. Everything is interconnected
There is a social responsibility for us all to eat and exercise!
5. Nothing is just 1 thing, each interaction has two sides!
Every patient is a cost and an asset. Every implant is a cost and an asset!
6. No one can ever be in complete control
Patient will recover but infections affect 3% patients. Patients that want workers comp will never heal!

Vision Skills+ Incentive+ Resources+ Plan+ Change=
Confusion
Anxiety
False Start
Frustration
Gradual
Change
Vision Skills+ Incentive+ Resources+ =
Vision Skills+ Incentive+ Plan+ =
Vision Skills+ Resources+ Plan+ =
Vision Incentive+ Resources+ Plan+ =
Skills Incentive+ Resources+ Plan+ =X
X
X
X
X
Commercializing Innovation

How do you accelerate innovation?
MD Anderson:
Plan: Attack Technology Transfer
Strategy: Integrate Applied Science & Basic Science
in safe & respectable
Goals: Make Decisions About:
1. Time?
2. Resources?
3. Probability Success
4. Opportunity Cost
5. Kill Projects
Solutions: Faster acceleration to curing Cancer
Lynda Chin, CIO MD Anderson

Accelerating Pace of Innovation

Acceleration @ Speed of Light

ABC Theory for Accelerating Innovation
Timing Price COGS
Launch
Decision?
+ + =
A B C
Score yourself green, yellow or red

1. Value Hypothesis
2. Distribution Hypothesis
3. Minimal Value Hypothesis
Hypothesis TEST for Accelerating Innovation

Three Step Scorecard Technique:
A. Is it more efficacious?
B. Is it less expensive?
C. Does it have staff support?
Innovation Scorecard

Mental Work Shop Exercise:
Everyone get your pencils out and hear the
clinical value statement for each product and
score yourself

Acceleration Score Sheet
TEST Product 1 Product 2 Product 3
Classification Supply Growth
Solution
Emerging
Technology
SAMPLE Adherus LiquoGuard G-Arm
ABC Decision
Hypothesis Test
Innovation Score
OVERALL SCORE

AHVAP 2016
Lower Costs By Leveraging External Partners

External Partners, Innovative Saturation Strategy!
$30,000,000$1,000,000
• 5 Management team members
• 25-50 Distributors
• 500 Indirect sales rep.’s
• Fast Growth but no control
• 100 Employees as Direct reps
• Slow Growth but controlled
Sales is the Lifeblood of Any Medical Device Organization

 Typical Distribution Sales Saturation Strategy
• 50 Independent Distributors
• 100-500 Independent Sellers
• 1 rep for multiple accounts/whole cities
 Other Benefits of Distributors (External Partners)
• Voice of Customer early & often
• Stocking Orders (pre FDA) provides funding
• Affordable way to buy market share
• No Employee Headaches
Independent Distributors

Did it Work @ Covidien?

Distributor Quota Attainment

Distribution Works Even in Highly
Penetrated Markets, like Bio Surgery

New Distribution Model
 One Master US Principal Distributor
 15-20 Independent Regional Distributors
 Four Regional Clinical Sales Managers
 Free Market, - best product floats to “Top-of-BAG”
 Smart Segmentation (scalable at speed of light)
 Feedback from Accounts/Surgeons
 Pay, - reward success
It’s time to Cut Fat in Healthcare, Even Further

Surgeons
Purchasing
Independent Distributors
Medical Device Companies
Insurance companies (lower costs)
Patients get products at cheaper cost
Everybody Wins

Closing Remarks, Remember to always lift
the V.E.I.L. to see what your getting!
Questions & Comments?

Contact Information:
Saros Medical Technologies Inc., Principal
Armamentarium, Director of National Accounts
1-800-231-4651
979-525-1973 direct
DChisholm@Armamentarium.com
www.Armamentarium.com

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