As originally asked by Robert Stathopulos.

I continue to be troubled by the poor outcomes demonstrated by medical product development organizations in producing new product winners. Industry surveys optimistically tout that about 1 in 8 projects yield new products that meet or exceed sales projections that justified those projects.

Improvements since the 1976 FDA medical device legislation have been incremental, but no breakthrough has been achieved. Disciplines like project management, stage-gate development, voice of the customer, and quality function deployment, among others, have clearly added to ‘good product development practices’ (or GPDP).

But how can the typical product development organization — Engineering, Marketing, Manufacturing, Quality, Clinical, Regulatory — improve its hit rate from 1:8 to 1:2? To address this question, I would like to ask Vice Presidents or Directors involved in Medical Device Development what are the key issues they continually face that affect the outcome of their product development organization.

I am a former Director of Product Development for several global medical device manufacturers, and currently advise medical device start-up ventures, in getting their ‘first product’ out of development and into production. Streamlining medical device development has been a life-long quest.

Bill Acevedo
at RF Telematics
There is a rule in product development, don’t fall in love with your project. I’ve had to kill many programs, some due to issues with critical subsystems, financial analysis or regulatory challenges. As more and more departments, people, investment and outside entities get involved it gets harder to “kill” a troubled program. There were cases where doing so was the best solution too. Learning why something doesn’t meet performance, price or business goals can often stimulate innovation and improve the next project and “death” should never be thought of as failure.

We did constantly invest in test development and fault detection as well but when dealing with consumer electronics with 6 month development and 6 month sales cycles it was crucial to get things right and win the shelf space. Once your on the planogram its easier to keep it, just deliver a better, cheaper and more attractive product 6 months later (which is often sold before kicking off the program). Much of this has not applied to Medical Devices but maybe it should….or will.

Mike Kagan
Early Stage Medical Diagnostics
Robert, So…way back when I worked at Ciba Corning Diagnostics, we had a simple 17 page booklet called the Innovation Process which was really the beginnings of a Phase Gate process. At each phase, each area of the company (Mktg, R&D, Mfg, Clinical Dev) had to answer some pretty basic questions, like the ones you are asking. Life was simple back then…but…the process is only as good as the people involved. If bias and personal interests influence the answers to the questions, all bets are off. I have seen this happen in several companies. The best organizations (and people) that I have worked with are self critical, willing to answer challenging questions and know how to put their egos in their pockets.

Robert Stathopulos
R&D Project Manager — Medical Device and Drug-Device Combination Products
The beginning of the product development cycle may indeed be the greatest culprit. What great initial screening methods are available that challenges a product development organization to choose wisely? Screening should probably be practiced at distinct stages in development.

What about a screen for the feasibility phase, where technical as well as commercial feasibility are challenged? What about a screen for the prototype development phase, where performance and reliability are challenged? What about a screen for the clinical development phase, where usability and clinical claims are challenged? What about a screen for the process development phase, where cost and quality claims are challenged?

Tom Mallison
Vice President Product Management at Optum 360
In terms of ‘first products’ fully understanding how variability in the design, components, and manufacturing impact the performance is difficult for many start-ups during transfer to manufacturing, especially if they are using contract manufacturing. I think the world needs a few more good system engineers.

Tom Mallison
Vice President Product Management at Optum 360
I definitely agree with the lack of agility in the development cycle and the inability to stay focused. We suffer from chasing too many “opportunities” without understanding the true value of the market. There also seems to be many early stages design choices that limit or impact the performance of the final product. Certainly shortening the development cycle would help. My only advice would be to maintain an outward product focus and keep the internal communication as detailed and frequent as possible.

Brian Stelter
Head of R&D and process eng.@ Okeller Tool
Wow, all these great responses hope mine is worthy. I ran a medical manufacturing plant, and some of you touched 2 of my biggest problems. A lack of respect/communication between Doctors and engineers and a commission based
sales market that rejects anything that will save the customers money if it removes
some of their commision including new technology that is sometimes much cheaper
or more efficient. I have two products that will never be produced because these items
replace a consumable item and the sales staff outright refused to let the product
move forward as it severly hurt their commission. I do not have a solution for this,
and it is not fair to ask a sales person to voluntair to sacrifice their income.
For instance, if you invented an insert that never wears out companies like
Kennemetals or Iscar might not be thrilled.
There should be a method to bring new ideas to market without this added hurdel
and a way to make it fair for those in sales so that the best ideas and tech get to market.

David W Bertoni
Managing Partner at [email protected] LLC
Robert,
Your question was not clear enough to elicit clear answers. The failure rates are not well enough defined. As you mentioned stage gating, if a project was killed before it made it all the way to market, would that be a failure? If a project is explored but abandoned before launch, is that a failure?
When you pose a more precise question we can have a more constructive discussion.

Subhas Mewar
Owner at R S MEDITECH
Actually major fault for this scinario lies with the sales & marketing department. They are simply busy in acheving their sales target & hardly ask the customer an important question. What improvements he recomands while sales talks are on.Feed back is the most important part for a product devlopement which anturally comes from non other than the user.

Bill Acevedo
at RF Telematics
I think some of the comments are also addressing another issue I’ve experienced which is a lack of agility in the development cycle. When you have a long development cycle while leveraging technology that is evolving at a rapid pace it is very easy to lose any innovation or economic justification that may have existed at product inception. While previously working on projects that met this description it wasn’t uncommon for suppliers to be paid a premium to keep EoL components available rather than assume the risk of designing in a new component that was better featured, packaged and priced. Aligning the design cycles of products with key components helps but is not a reliable solution.

What has evolved out of this over the last decade are intelligent data driven systems that quickly validate concepts, fault detect, transfer knowledge and evaluate product quality. I think the Medical device industry has reached an inflection point and requires these types of solutions due to increasing market and regulatory pressures. The good news is the industry is far behind and as a result will be able to take advantage of the experience, lessons learned and work product of other industries. Some of the larger Medical Device firms operate in multiple industries and are already adapting cross-industry solutions to meet the current and future challenges.

Robert Stathopulos
R&D Project Manager — Medical Device and Drug-Device Combination Products
I agree with Keith and Mike. The selection of really new product opportunities becomes a key part of this situation. When push comes to shove, executive management often opts for the shorter-term, less risky project. Me-too products and line extension still appear to be a major staple of corporate product development portfolios. Apart from the risk aversion demonstrated by most established manufacturers, really new opportunities are often not adequately defined before major funding is requested. They don’t know what they don’t know, which means that a much longer feasibility phase is needed before a commitment to develop and commercialize the product can be made. Therefore, maybe part of the answer to poor product development output is more feasibility funding without further commitments.

As Jeff says, ‘failing quickly’ is more effective than ‘trying to make it go no matter what happens’. Unfortunately, good business sense is often overshadowed by executive ego and fear of being wrong.

I also like what Tina is saying. There is a very real inflexibility in development commitments that are made. Since most product development programs take years to complete, the market and customer change, and that change is often ignored rather than integrated into the ongoing program. Some new products are dead before they are launched because the market has evolved.

Tina Hudson
Chief Operating Officer at Delphi Diagnostics, Inc
Mike, Keith – I agree and believe versions of this same issue occur in all companies, regardless of maturity. During the course of development trade-offs are often made to address other business goals, i.e. improve time to market, reduce cost, reduce testing burden, reduce risk. Most often these trade-offs are at the expensive of new product features or functionality. Although taken individually or at the time of the decision they might seem appropriate (necessary even) the result is often a final product that does not hold as much market appeal as the original product concept on which sales or market projections were based. Even when attempts are made to adjust expectations/projections based on “trade-off” decisions made along the way; this is rarely successful as companies are reluctant to abandon or re-boot significant product development efforts once they are past a certain point.

Keith Bradt
Sales Manager at Crescent Industries: Custom Engineered Solutions & Injection Molding | Single Source Solutions
Mike I agree that this is one of many reasons, and to your point about ‘young’ companies I think they can fall victim to that very easily because they are so eager to create revenue, that short term gains can overshadow decisions that will build long term growth.

Jeff Fisher
Senior Director Of Operations at Thermo Fisher Scientific
In my experience, the low long term success rate stems at least in part from failing to listen to the results coming out of the product development process. Field problems or user issues were almost always seen during development but were downplayed or rationalized to keep the project moving. While no one wants a 1:8 success in the market, the product development team really doesn’t want a 7:1 failure rate in development. If you can develop a culture where the function of product development is to “fail quickly” your success in the marketplace will go up.

Mike Kagan
Early Stage Medical Diagnostics
Keith, what you suggest could be one of many causes for a low success rate. Time to market is a real driver; time to market with a product that doesn’t meet customer needs is shooting yourself in the foot. I think most ‘young’ companies underestimate the resources ($ people, skills, etc.) required to develop and launch a robust product that truly meets user needs. The, when they find out what it will really take, they find out that they don’t have enough cash…then the compromising starts…the beginning of the end, in many cases.

Keith Bradt
Sales Manager at Crescent Industries: Custom Engineered Solutions & Injection Molding | Single Source Solutions
I agree with the comments above, especially the challenges of the transfer from R&D to production. Additionally, does anyone think perhaps the success ratio is lower because of the products, or projects, that are selected to work on. By that I mean, is the success rate lower because the increasing pressure to generate revenue causes less desirable products to be funded over more attractive products that might take a longer time to bring to market in the hopes of generating faster short term sales dollars.

Edward Panek
Vice President of Quality and Regulatory Affairs at Blue Spark Technologies
“The most frustrating experience I’ve ever had is the appearance of a major design or performance issue that should have anticipated and planned for.”

Or when introducing a proven product into a new market. Who would have thought that your product could be delivered via bicycle or rickshaw in a rainstorm in Asia.

Robert Stathopulos
R&D Project Manager — Medical Device and Drug-Device Combination Products
Bill — I very much agree that Technology Transfer is a key issue. In particular, I think the communication between R&D and Manufacturing is rather poor. R&D usually provides a new product that needs work in terms of manufacturability. And Manufacturing is usually focused on current products, so that new product commercialization becomes a major distraction.

Tim — It seems standard practice that too many projects are being pursued simultaneously. One or two high-impact new products are always worth more than five or six me-to or line extension products. In addition, I think that many device manufacturers under-estimate the efforts required to maintain the product lines that they produce, which drains their Manufacturing resources and often draws in R&D.

Mike — You are right on about hidden or unanticipated risk. Though no one can anticipate what could go haywire in new product development, thorough planning and risk assessment will always uncover blind spots that need to be investigated further. The most frustrating experience I’ve ever had is the appearance of a major design or performance issue that should have anticipated and planned for.

Mike Kagan
Early Stage Medical Diagnostics
Robert, What keeps me awake? The question: “Have I missed something?” Too often we lose our objectivity and don’t see hidden risks..or risks that we don’t want to think about. I think a fundamental root cause for a company’s failure is unaddressed risk (known or unknown). I normally suggest seeking outside council to get an objective view of risks..and then taking serious action to de-risk to program.

Tim Powers
Inspiring Teams to Deliver Quality & Compliant Medical Products
The first question to raise is if the goal is to hit a 1:2 ratio, the problem may not be with better development techniques but rather starting fewer new product programs. I transitioned from the telecommunications industry to the medical device community and beside the obvious difference of FDA regulatory, the big difference in medical devices versus other business devices is the size and age of the installed base. Other industries can obsolete old equipment with dramatic improvements in new equipment. The new medical device products have some improvements but not enough to compel customers to purchase the latest equipment. Therefore a large proportion of R&D needs to be devoted to the installed base to keep current customers happy which dilutes the talent pool for making very innovative products. The R&D composition also requires some shifting. Many medical device manufacturers have large electro/mechanical teams and a modest software team. Other industries have already realized the true value-add is in the software and have a large proportion of R&D in software. As the medical device community becomes more digitized, new entrants with excellent software capabilities will use commoditized electro-mechanical components to create the next wave of compelling medical products.

Bill Acevedo
at RF Telematics
I am somewhat amazed that the lofty goals set by the MedTech community as they would be utter failures in other industries. There are some technologies/strategies that I believe can make improvements I’ve employed in the high volume consumer electronics and automotive industries. If I needed to pinpoint an area of weakness it would probably be technology transfer among departments and vendors. From the discussions we’re having in the medical device arena this is where many issues are introduced or missed. I am confident the technology platform we’re adapting from the auto industry will resolve these problems and more on a global scale. Another issue I think is not far behind is awareness. I feel this should go further than post market surveillance as quality, liability and reliability have a significant impact on overall success and profitability once a product enters the market.