Friday, June 1, 2012

Lack of Innovation? He Said It

In a recent Financial Times article, the newly appointed CEO of Smith & Nephew, Oliver Bohuon stated that the Medical Device Industry should stop whining about the government and government cut backs in funding health related service, and cast aspersions on the device industry by stating that the industry has no one but itself to blame for not developing state of the art, game changing products that would transform the delivery of healthcare and perhaps even reduce health care cost in the long run.

Bohuon is quoted in saying that "when we talk about price erosion 3%-4% many people are blaming this on government austerity measures, but they are wrong. What is happening is that we as an industry are not bringing in enough innovative products to get higher prices....... Innovation is the bread and butter of this business."

Bohuon's belief is that healthcare providers would pay a premium for devices that would save them money.  A prime example has been the assault on reducing the ASP for  pedicle screws, cervical plates, inter body devices and biologics.  Without aggressive innovation companies are left having to drop prices to maintain their success. Squeeze me but please me. The end result, tighter margins and more pressure and stress on the sales force to generate sales in a zero sum marketplace.

So obviously our readers will ask does Bohuon practice what he preaches?  S&N intends on investing $300 million over the next 5 years into R&D, the irony of the story is that even with this "mea culpa" moment, S&N is trying to boost margins by cutting jobs, a far less ingenious way than holding the company accountable for lack of innovative.  Who knows, maybe if some of the CEO's held themselves accountable the spine industry would be innovative, but its easier to blame the boogeyman than take responsibility for one's actions or lack of actions.  

As cost containment escalates, it will be interesting to follow the small fly by night companies that continue to surface with cheaper pedicle screws while expanding their sales with stocking distributors.

13 comments:

  1. Smith & Nephew has been threatening for some time to bring "innovation" to spine. Well, we're waiting...

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  2. Endoscopic decompression saves money and provides better outcomes yet is not paid for.

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  3. Smith & Nephew has a spine line?

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  4. I believe you missed the point of the post. What are some people reading, goodness gracious no wonder you got low SAT scores LMAO

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  5. Look forward to another DBM or synthetic claiming to have magical powers...Classic rookie mistake, Ollie.

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  6. sad truth nobody want to listen to.

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  7. The problem is that people hear what they want to hear, read what they want to read, and interpret everything from their own perspective, as TSB loves to say, "think for yourself" a difficult concept

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  8. SI-Bone is in the world of hurts...lost funding, and probably going to a T code. They have fired mulitple folks, many more to come in October if this happens. Join the Jason boys club, blind but happy. They have now changed upper management to the detrement of the company...bail now while you have the chance.

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  9. Lawyers are in wait for Jayson. Scaled down the team for profitablility, but just a ruse. Hiring outside the company ignoring the team in place. If the loss of funding and new codeing does't take this company down, Jason will, with lawsuits!
    Si-Bone is falling fast.....get out before the blood letting occurs.

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  10. SI-BONE is not unlike any other start up that seeks to take the fastest track to market via a 510(k) clearance. The product addresses an unmet need but lacks data from an RCT to validate the medical merit of the procedure. No one in this thread has remarked that the product is not safe or effective. The challenges can be overcome via evidence generated from well-designed clinical studies. That is the real challenge ahead for the group. Downsizing makes sense for now. Nothing good comes easy!

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  11. Going to a T-code in Feburary? Bail while you can get a new job! Also is Jason the new VP of Sales having an affair with a Dallas Rep? Rumors are is that he is. Does the company support this?

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