The Changing Economics of Medical Technology (1991) / Chapter Skim
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6. The Dynamics of Medical Device Innovation: An Innovator's Perspective
6. The Dynamics of Medical Device Innovation: An Innovator's Perspective
Pages 89-95
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From page 89... ...
, the nature of that R&D, and the public policies that affect it. For example, if we compare the device industry to the drug industry, we see smaller companies taking the lead, a more fluid innovation process, and looser regulations on medical devices.
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From page 90... ...
Until the recent changes in the income tax laws, the patent application played a significant role in determining whether royalties paid to the inventor would be treated as ordinary income or capital gains. The simple fact that a patent had been applied for signaled the Internal Revenue Service (IRS)
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From page 91... ...
The investment community is not as enchanted with the medical device industry as it once was. New technology is no longer welcomed in the hospitals unless cost effectiveness can be demonstrated early in the product cycle.
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From page 92... ...
First, some granting agencies require so much administrative and reporting procedures that the cost to a small company does not justify the $50,000 awarded in Phase I In addition, the time period between the funding of Phase I and the funding of Phase II is often so long that a small company could not possibly wait that period to continue with its product development efforts lest it run out of funds in the interim.
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From page 93... ...
A drug product is usually in its completed form prior to marketing and is described by its chemical formula, and the dosage form remains stable for most of the life of the product. In contrast, devices constantly are being modified to remove defects, improve performance, and add features throughout the product life.
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From page 94... ...
Monitoring patients provides the clinical staff with documentation that provides evidence for the quality of care provided. Since the burden of proof of adequate care falls on the health providers in malpractice cases, this documentation is helpful.
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From page 95... ...
In particular, policy makers will need to take into account differences between drug and device innovation, as well as the importance of the small business community in generating devices.
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