I am in medical school now, but I used to be an EE in the medical device space; my experience was that so many device makers sell through one or several layers of intermediaries that prices have to be jacked up substantially to make any money at all. We're talking selling products with a BOM <$150 for $3000+ (these weren't highly specialized med products either - you'd find similar devices in practically every doc's office). As a result, the companies never moved enough units to justify a refresh of the design more than once every 10-15 years.
I'm very happy to see someone trying a leaner approach, and I hope you guys do well! Sell me some cool stuff in a few years :)
Also, let us know what kind of devices you want to see! We like to build things people want...
Co-founder of AsthmaMD here [1]
The first product looks great. If/when you guys decide to venture into asthma care and are looking for partnerships please write me a line, salim at our domain.
We also have a business model that allows us to leverage software in ways that lower costs of doing business -- some traditional areas like sales and support, and some non-traditional ways as well.
Probably the most important part of startup culture that's letting us innovate differently is the ability to create product development processes that prioritize human centered design. It means we develop and test in a different order, and our failure criteria for tests are not just about function, but also about form.
But it's really not that bad once you get the hang of it. If we could say anything to other people considering taking the plunge, it would be to not be afraid of the medical space. Sure, it's a regulated space and some things are more complicated, but the difficult problems are the more interesting ones to solve!
More along those lines: http://www.shiftlabs.com/blog/on-being-a-medical-device-comp...
Do you do FMEAs for risk analysis, or some other technique?
Grateful for any insights you wish to share.
the reason medical devices are so expensive is a lot more complicated than what this article suggests.
1) upfront costs. you have to complete the development of the product before you can conduct clinical trials. this is a huge risk: if you say the device is ready, but the fda or eu says it's not, then all that work is gone or has to be redone and you have to foot the bill.
2) clinical trials and animal testing are insanely expensive. I'm talking 50k+ for 1 dog to test your device on. don't even get me started on human centric trials.
3) risk of litigation. look at the current mess with vaginal meshes: boston scientific, medtronic, and others are paying out huge sums of money over faulty tech that was approved by the fda.
4) regulatory overhead. navigation of the fda and ce mark beaurocracies is complicated enough that it is an entire industry in itself. we have a full team working on our project full time just to make sure we stay within the law, to meet with the fda and eu, and to do all our governmental paperwork.
5) ip law. medical companies sue eachother for patent infringement all. the. time. if you aren't checking to make sure you aren't violating patents, you are exposing yourself to huge amounts of risk. hundreds of millions of dollars of risk.
sigh.
plus all the overhead to navigate each hospital's unique purchasing process, dealing with different regulatory requirements in different countries, different radio spectrum requirements (if your tech uses any type of emitors) in different countries, traceability requirements in manufacturing, certified manufacturing sites, and all the rest.
sigh.
but the good news is that I'm an expert at navigating these treacherous waters and am looking for a new job. if anyone at shift labs (or other medical device manufacturer) is interested in a chat, feel free to reach out.
While each of the items you mention are totally relevant, we've also found that it's possible to mitigate a lot of these risks and costs with careful strategy.
For example, we're building devices that don't require animal or human clinical trials. That saves a tremendous amount of time and money in development costs -- but there are still large, lucrative markets to tackle.
IP is hugely interesting, and our approach to developing simpler technologies means we're not neck deep in the kinds of cutting-edge technology that comes out of research labs. That affects our IP exposure.
The regulatory hurdles are absolutely there, and for a long time we found them daunting -- almost paralyzing. But once we dove in, especially with a great expert on our side -- it became manageable.
This is all to say, you're right: it's hard, and it's complex, and it can be expensive. But we're really enjoying figuring out where the spaces are in between all these hard things and finding new ways to make things happen.
All that being said I do think this venture is fitting into an emerging niche in the market place due to the low cost of designing/re-designing devices. Things like 3-D printers for prototyping, etc. means that the cost to develop a medical device does not require the profit margin of a high-end medical device in order to get back costs.
By removing the need to support large support staffs, and reducing our sales team requirements by aiming at markets outside of large hospital institutions, we are able to keep our overhead low compared to the competition.
I hope that makes thing a bit more clear, but happy to elaborate if you like!
We have already gotten strong feedback for more connectivity, so that's definitely something we're working on.
