Novel Technology Development
Preface: NOMOS – A Case Study
NOMOS was faced with many of the same technology issues that confront most startups. The company began in the proverbial garage, where a novel idea of how to deliver a radiosurgical treatment for brain tumors – without the need for complicated treatment planning or a sophisticated delivery device – initially took shape. Its technology exploration path ultimately led to the development of a device and treatment planning software for modulating the intensity of a beam of radiation across a surface to spare tissue – even on the inside of a tumor. The company invented intensity-modulated radiation therapy (IMRT).
The development of a technologically advanced idea is dependent on the tools at hand. NOMOS’ first IMRT treatment plans required days of running to execute the code. Fortunately, advances in programming and in hardware reduced that time requirement to a couple of hours by the time the technology was commercialized in 1996, and to minutes by the time it reached its peak in 2000.
Along the way, the company had to decide on a clinical focus for its technology. Although the technology was originally created to treat intracranial tumors, users also wanted it for urologic and head and neck applications. To make such treatments possible required the development of additional technologies. Several of these additional applications – for instance, ultrasound image-guided prostate localization – went on to have successful lives of their own.
Long development lifecycles are not uncommon in the medical device field. For example, the Da Vinci surgical robot is a marvel of medical technology that is wildly successful today. But it endured a long development period that started in the mid-1990s, with several iterations along the way, before it became a clinical and commercial success. It was not until Intuitive Surgical and Computers in Motion merged in the early 2000s, and Da Vinci was applied to prostatectomies, that the technology and the company found the path to becoming the success it is today.
The technical process and path required to create a novel medical technology is worthy of a series of blogs on topics such as:
- Sourcing ideas,
- Engaging the talent required to turn the idea into a reality,
- Determining whether to use existing building blocks or to create everything from scratch,
- Making the technology work reliably in the sometimes hazardous medical environment, and
- Designing a device that is user friendly.
This “Why It takes So Long” series of blogs will examine factors often overlooked when making early decisions in a development path. Although each of these factors should be considered when developing focused ultrasound technology and its associated clinical applications, the same considerations play a role when developing any technology. Watch for future installments of this series, where many of these topics will be explored in greater detail.
Understand the Competitive Landscape before Jumping In
Just because you think you have a great idea that has never been proposed – that also solves a glaring need – does not mean that someone else is not pursuing that idea or a similar one. For a device company, keeping abreast of developments in the field requires extensive networking and market intelligence outreach. It also requires knowing what is ongoing in the biotechnology (or drug) space, which is usually better funded and less risk averse than the device space. Many ideas have been abandoned at some point in their life due to a competing approach that was better developed, appealed more to clinicians and hospitals, or presented more attractive economics.
This is actually what happened to NOMOS. Unbeknownst to its founder, an academic spinoff was working in the exact space at the same time. While the spinoff, a company called Tomotherapy, was pursuing an IMRT linear accelerator replacement that was comparable to the NOMOS approach (which was to add on to existing linear accelerators’ IMRT capabilities), the devices used to modulate the accelerator beam were essentially the same. NOMOS and Tomotherapy were able to work together cooperatively for a period of time to get IMRT to the point of clinical acceptance, but the existence of each company certainly impacted the financial success of the other, at least early in their tenure.
Identify a Truly Attractive Target Market Before Getting Started
Many great ideas languish for want of a “killer” application. Investors will want to know that the technology being pitched fills an unmet need, addresses a need better than existing technology, and targets a market where the need is quantifiable and of sufficient size.
A new device to treat prostate cancer, where there are already many devices trying to challenge the status quo of robotic surgery and radiation therapy (with limited success), is going to have a hard time gaining traction with investors, let alone the marketplace. Conversely, developing a new device to treat obstructive sleep apnea, where there is no truly satisfactory solution, the market is huge, and the public is willing to pay cash, has a much greater likelihood of generating the investment interest required to bring it to market.
For NOMOS, it took almost decade for a field that did not see the need for IMRT eventually to accept the vision of the NOMOS’ founder – that IMRT would allow better disease control with fewer side effects than prior forms of radiation therapy. By that time, there were other competitive technologies from major radiation oncology players that ultimately led to the demise of the company as a standalone entity. Intuitive Surgical languished for years without a clear path to clinical or commercial success. It was not until it ventured in the prostate cancer space that the utility of the surgical robot was realized, and it became a successful company.
Develop a Regulatory Strategy During Product Development
Regulatory considerations must be considered while making the many decisions necessary when designing a medical device. Considering the regulatory constraints from the start will save time and money, while mitigating frustration. For instance, if the device is to be authorized via the premarket approval (PMA) route, which is the most stringent, getting a version of the device into the hands of clinical users early – even before all facets of the design are finalized – may jumpstart the clinical data collection piece of the regulatory submission. Consideration early on for other potential implications – like the use of a disposable, remote access, or interconnectivity to hospital information management systems – may lessen their impact on regulatory and quality assurance routes.
Develop Model Economic Considerations, Including Possible Reimbursement Scenarios, During Product Development
Medical devices usually fall into one of three economic categories: capital purchase, recurring revenue stream, or a blend of the two (most common). Identifying the path that is most likely to be taken with a new technology will help shape the design phase of the new device. This question most often arises when considering whether to include a single-use item in the device’s design.
If the new device represents a one-for-one replacement of an existing approach that already has reimbursement payments associated with it, and if its capital cost is less than competing devices, then it may do very well in the market without requiring changes to the payment landscape. This was the case for the NOMOS IMRT system; it co-opted existing codes and cost less than competitive technology, allowing it to be sold as a capital-only device.
However, if the device requires the creation of a new code and/or new payments, then including a disposable in the design may be required economically. Doing so may create a payment structure that will better approach the hospital’s actual cost of performing the procedure (covered in more detail in a blog on reimbursement). Yes, a disposable increases the cost to the hospital, but due to the vagaries of how Medicare determines payment, it may push the procedure into a higher payment level that more than covers the added cost of the disposable. In addition, investors prefer this approach because it generates recurring revenue.
Consider How the Device Will Be Supported and Serviced
There are many ways to support and service devices, ranging from using in-house resources, to using outsourced resources, to a blend of the two. Advances in computers and remote monitoring have progressed to the point where training, technical support, and product servicing can often be performed using only remote resources if the product is designed appropriately. As a result, decisions about support and service should be considered up front rather than after the product is ready to be sent into the field.
As an example, one of the focused ultrasound manufacturers determined that, due to the computer-controlled nature of the focused ultrasound ablation procedure, the company could train and monitor users by equipping their product for remote access, a realization that occurred after the product had already been introduced into the field. Equipping the product post-introduction with this capability was more costly, labor intensive, and less fully integrated than if such capability had been added during the design process.
Avoid Delaying Product Introduction Until It is Perfect
There is almost always a desire among the founders and employees of a new venture to come out of the gate as strong as possible with their first product, waiting to introduce it until it has every advanced feature imaginable, wanting to make the biggest splash possible. Adding bells and whistles to device a device that is functional and effective before obtaining market feedback from users will increase the budget, lengthen the timeline, and may subject it to added scrutiny by the US Food and Drug Administration.
It is usually in the best interest of the company and the user to focus on perfecting the core functions of the device while saving extra features for later, especially those that are not critical to how the device meets the intended use. After the core elements have been clinically proven and the device is gaining traction and user experience, attention can be turned to a second-generation device that includes proposed new features in addition to adjustments or corrections to existing aspects of the device based on field experience. This will keep investors happy, get the product to market faster, and create an excited user base that is eager to see further advances in the technology.
As mentioned above, the cost of adding remote monitoring after a product has been introduced is much greater than if it is part of the original design. However, understanding how the device will be used, by whom, and where it will be located is needed before adding remote access. If this decision had been made as part of the original design, it is highly likely that expensive changes would have been required after market introduction to accommodate user needs and to incorporate evolving technology.
It Will Almost Always Take Longer and Cost More Than Anticipated
If the goal is to bring a technology to market that has never before been commercialized, the odds are great that unanticipated challenges will arise. The more cutting-edge and unprecedented the technology, the more time it will take to develop, realize regulatory authorization, gain user traction, and achieve reimbursement. Therefore, it is prudent to plan for problems and unexpected obstacles when developing a timeline and budget.
Because most investors will add a “fudge factor” when calculating timelines and costs (usually 2x for both), companies can gain early credibility with investors by including these “unexpected factors” in the projections. Go through each step in the progression from concept to commercialization, list all the areas where things could go wrong or get delayed, assign a realistic time and cost to the delay or rework, then total them such that when added to the original timeline you will have created best- and worst-case scenarios. Presenting this to potential investors will demonstrate that you have a real handle on the requirements for a successful development path.
In the end, it is prudent to ask whether the milestones and value-creation episodes to be achieved when developing a new technology are truly and realistically understood. These include proof of concept, prototyping, bench testing, clinical evaluation (if required), regulatory, reimbursement, and commercialization – which itself includes building, selling, servicing, and supporting the technology. While most of these occur far down the path, exploring them in detail up front, and determining whether there are unknowns that could impact actual technology development, is a required process if surprises and disappointments are to be minimized.
Mark Carol, MD, is a senior consultant at the Focused Ultrasound Foundation.
Read the Series
- Part 1: The Complex Ecosystem of a Medical Device Startup
- Part 2: Novel Technology Development
- Part 3: Regulatory Authorization
- Part 4: Reimbursement
- Part 5: Physicians
- Part 6: Patients
- Part 7: Facilities