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Olympus Recalls UHI-4 Insufflation Unit
After reports of patients experiencing arrhythmias during surgical procedures where Olympus Medical’s High-Flow Insufflation Unit, Model UHI-4, was used, the company is now recalling the device, which has been labeled as Class I.
The Olympus UHI-4 is designed for insufflation of the abdominal cavity for diagnostic and operative laparoscopy, according to the company. Insufflation is the act of blowing something into the body cavity, usually CO2 gas. UHI-4 works in conjunction with the Thunderbeat platform to eliminate smoke and mist through its adjustable smoke evacuation feature as well as a small cavity mode for endoscopic vessel harvesting procedures. Insufflation using the device allows for a quick response to gas leaks, meaning surgeons are able to remain focused on the procedure. The cylinder hose comes with a CO2 switch-over valve enabling surgeons to change CO2 tanks without interrupting long procedures.
The company said that the decision to initiate the recall came after reviewing reports of patient injuries and one death which, according to the FDA recall entry, “may have been due to an over insufflation of the abdominal cavity resulting from use of the UHI-4 during the procedures.”
Initiating the recall on Sept. 22, which was recorded on the FDA medical device recall database on Oct. 18, the company has not disclosed the total number of injury reports, potential deaths associated with the recall, or when Olympus was made aware of the safety issue. The recall effects 3,136 units in the United States, according to the FDA filing. Olympus recommends customers carefully read the Field Correction Action Letter and report complaints, including injuries associated with over insufflation during a procedure using UHI-4, to the company.
This isn’t the first time in 2023 that Olympus has been in FDA’s crosshairs. In January, Olympus Medical Systems and its subsidiary, Aizu Olympus were hit with a warning letter detailing violations of the Federal Food, Drug, and Cosmetic (FD&C) Act at its manufacturing facility in Aizuwakamatsu, Fukushima, Japan, addressing compliance issues related to the reprocessing of endoscopes.
In March, Olympus Medical Systems once again received a warning letter about FD&C violations, this time at its Tokyo, Japan facility. The letter reported violations including compliant handling, medical device reporting, and corrective and preventative actions.
ResMed Layoff 5% Amid Reports of Strong Q124
In an attempt to fine tune its long-term growth strategy amid?unknowns as to when Philips will reenter the sleep apnea market, ResMed seems to be refocusing and rightsizing the business in anticipation, resulting in a 5% reduction in its global workforce. The company, which has more than capitalized on the unprecedented demand for sleep apnea devices while Philips continues to wade through recall woes, announced during its Q124 earnings call that it was taking actions to “accelerate profitable growth across ResMed and to power our long-term success.”
These actions, according to Mick Farrell, ResMed CEO, include putting a stop to more than one project, increasing investment in digital health, and focused hardware and software development.
“We have stopped some projects that were not working out as well as we thought,” he said in the earning call, according to a?SeekingAlpha transcript. “We've increased investment in areas that we believe will be pivotal to long term success, such as our digital health tech investments as well as focused hardware and software development. Creating the smallest, the quietest, the most comfortable, the most connected and the most intelligent healthcare solutions in the market.”
The changes, however, mean layoffs. While the company didn’t disclose the exact number affected in the cuts, the most recent information available puts its company count at just over 10,000 employees, meaning a 5% cut could impact at least 500 individuals.
“These changes have impacted some of our teams,” Farrell said. “And this week, we have taken actions that resulted in a reduction of our global workforce by 5%. Decisions like this that impact people are never easy. However, we know that we are doing the right thing, and we're doing the right thing to accelerate our growth and to refocus on our long-term mission. I feel more strongly than ever that we are well positioned with an incredibly long runway of profitable growth and value creation for all of our stakeholders as we move forward.”
The layoff notice was announced in tandem with the company’s reported quarter of strong growth. For Q124, which began July 1, ResMed saw revenue toping over $1.1 billion, a 16% increase year over year. Net income came in at more than $219 million, up 4% compared to the year prior, and net profits also rose during the quarter. This is despite expenses the company took on in the acquisition of Medifox Dan, increased component and manufacturing costs, and an $8 million provision to handle corrective action costs for some of its Astral ventilators.
ResMed’s gross margin did, however, shrink down to 54.4% due to the expenses from 57% a year ago. Its stock price also saw a hit, one that continues its slow dip downwards over the last few months. The stock first went below $200 in August after the release of its full-year 2023 results and has since continued its trip down, spending the last two months below $150 a share.
Health Equity by Design: Building Best Practices for Medical Innovation
This year’s MedtechVISION (MedtechWOMEN’s annual conference) was dedicated to the challenges and opportunities in addressing health equity in the medical device industry. While the panel on women’s health was particularly timely, and the economics of improving equity provided plenty of fuel for those seeking the financial bottom line, the panel in-between was nearest and dearest to my own interests: how health equity plays out in the long complex process of developing new health technologies into safe, effective products.
While the potential sources of health equity are many and complex, the basic concept as it applies to medical devices is not. Every idea for a new medical product comes with an implied value proposition: “If this product is purchased and used properly, it will deliver ‘X’ benefit to the patient.” But this analysis is frequently based on statistics, seeking to deliver an average benefit across a theoretical optimal percentage of a population. What we are learning is that large patient groups (united by race, socio-economic background, location, gender, or education level) are not receiving that promised value, even being harmed rather than helped.
Not only is this ethically wrong, but it has major consequences for market penetration, reimbursement, profitability, and many other metrics for product success. However, there is no way to provide a quick fix to health equity issues once the problem is exposed in the marketplace. Just like sustainable business models, effective risk mitigation, or cost-efficient manufacturing, success at the end is best secured through strategic, intentional interventions at each stage of the process.
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This is why the guests for the MedtechVISION panel followed the well-established steps that every new idea must pass through on the way from vague concept to successful product on the market. At any point in time, thousands of potential life changing technologies are being conceived at patient bedsides (as observed by doctors like panelist Dr. Leeda Rasheed), built and expanded on by company founding teams (like those that take part including panelist Dr. Kathreen Zavalla’s MedTech Innovator), designed and tested (by teams led by individuals such as ?panelist Nivi Arumugam), reviewed and approved by regulators (supported by legal experts like Vernessa Pollard) and finally launched into full manufacturing and distribution (relying on the infrastructure and industrial support technologies developed by CL Tien and her peers). At each of these stages, there are opportunities and challenges for health equity built directly into the bones of the evolving product.
During the MedtechVISION panel, Dr. Leeda Rashid shared a story about a patient diagnosed with late-stage breast cancer. The diagnosis was late not because of the lack of clues or clinical observations, but because that information was scattered, a natural result of a patient with no clinical “home base” to consolidate the information. Currently, one-third of Americans lack a primary care physician to fill that role. Beyond a major concern for healthcare in general, this skews the consolidated clinical data that the industry relies on to identify innovation opportunities. It becomes a bias towards solving narrow specialist issues, or broader care issues that affect only patients with centralized data records.
Much like only seeking problems from a limited collection of data, constricting the pool of talent to solve those problems can actually further compounds equity issues. Zavalla, COO of MedTech Innovator, the largest medical device accelerator program in the world, shared the challenges her organization has in building diversity into their program’s founder cohorts. Those who have the resources to start successful startups are typically highly educated, affluent, with living situations and social connections that match. Even those startups claiming to address major health disparities rarely have a founding team that has personally experienced those health disparities themselves. That lack of personal experience can lead to cultural blind spots that are difficult to circumvent as the company scales.
Even when a need is identified and a promising solution charted out, heath equity issues can creep in during seemingly benign engineering and development processes. Nivi Arumugam, currently a VP of R&D at Becton Dickinson, had never considered health equity as an engineering concern until the company’s pulse oximeter issues were announced by the FDA in early 2021. As pulse oximeters triaged COVID-19 patients over the 2020 year, research found that darker skinned individuals were being underdiagnosed for low blood oxygen levels. Some oximeter designs had not systematically checked their sensor performance across all potential skin tones, and so missed a key failure point in their product.
Testing issues may start at the engineering workbench, but they continue to play out in the much higher stakes of regulatory approvals and clinical trial design. While health equity issues that hamstring trials are a nasty surprise for any early-stage company, it is the issues that arise only after they hit the market that are particularly concerning. This is not just a failure of a product, but the failure of the system intended to ensure those products are safe.
Vernessa Pollard, a partner in the Life Science practice of McDermott Will & Emery, has seen the tension between providing products that are proven safe and products that are affordable play out among her clients, large and small. Existing labeling for medical devices frequently includes contraindications for use based on age, conditions, medication use, or other risks. Some of these conditions are included because of known issues, and some because their impact on the therapy is unknown. This is frequently the case with the very old, the very young, and those with multiple health conditions. However, prior to the pulse oximeter issues, skin color response had rarely been tracked in a clinical trial or listed as a potential risk due to its untested status. The balance between evaluating every scenario and getting products to people as quickly as possible is still evolving as the FDA continues to refine its policies.
A major joint report by the Institutes of Medicine, Science and Engineering was released as a draft shortly before the MedtechVISION conference. It discusses the various types of equity involved in health innovation and addresses many of the stage specific challenges I have discussed here. In addition to those opportunities to address equity by stage, the report included the issue of “contextual equity.” This refers to any innovation that relies upon the ongoing existence of past inequities.
As new technologies develop, hundreds of choices are made about how it will be manufactured, sterilized, packaged, shipped, and maintained. Each of those choices has a potential impact on workers, their families, and communities. Many of those most vulnerable to health equity issues are those who fulfill medtech operations: the molding machine operator, the plant maintenance mechanic, the package delivery team, and the hospital janitorial service. CL Tian, CEO of Phiex technologies and recent grant prize winner of the MedTech Innovator 2022 Cohort, spoke passionately about her work to address community health concerns around ethylene oxide sterilization. In the industry’s quest to “do good” for patients, she emphasized a similar focus to “do no harm” to the broader community. These types of issues do not have simple or straightforward solutions in an industry whose products mean literal life and death to their users. Long-running inequities would not last so long if changing them did not involve major effort or potentially new risks.
Adding health equity practices to health innovation should not be seen as constraining the system further or increasing Innovation burden. Instead, it is addressing the previously invisible reasons why so many promising technologies fail to thrive and scale to what is claimed in the early pitch decks. We are just beginning to be aware of the problems, and just like any new challenge to our existing system, it is a long road from the first negative signals, through identifying the root causes, to trying out new solutions, and developing those solutions into standard practice.
Many thanks to Dr. Leeda Rashid, Dr. Kathreen Zavalla, Nivi Arumugam, Vernessa Pollard, and CL Tian for sharing their brilliant experiences on the stage, and for MedtechVISION for giving them a platform.
What Role did Sarah Jessica Parker Play in the EpiPen Pricing Madness?
Pharma giant Mylan became ground zero for the debate over rising drug prices back in 2016. At issue for Mylan specifically?was its?EpiPen pricing.
An EpiPen is a drug-delivery device used to treat life-threatening allergic reactions. Mylan?increased its EpiPen pricing by nearly 500% over seven years.
Sarah Jessica Parker, whose son had a life-threatening peanut allergy, joined Mylan in launching a consumer-generated media initiative in May 2016. It was a short-lived relationship.
“I was recently involved in an initiative to raise awareness for anaphylaxis,” Parker wrote in an Instagram?post in August 2016. “It’s a cause deeply important to me because of my son’s life-threatening peanut allergy. . . . I recently learned that the price of the EpiPen has been systematically raised by Mylan to a point that renders the medication cost-prohibitive for countless people."
The actress went on to say she did not condone Mylan's EpiPen pricing decision and was ending her relationship with the company as a direct result.
In December 2016, Mylan launched a generic?epinephrine auto-injector, priced at less than half the cost of an EpiPen.
The EpiPen pricing controversy also inspired do-it-yourself (DIY)?enthusiasts to?MacGyver their own EpiPen, touting that the devices cost less than $40 a pop to make. One such DIY project that attracted attention that year was Michael Laufer's so-called "EpiPen hack," which he dubbed the EpiPencil. A graduate student (at the time) in the mathematics PhD program at City University of New York, Laufer built the EpiPencil with an off-the-shelf needle injector marketed to diabetics with a syringe loaded with a dose of epinephrine. He posted instructions online and estimated that those following his instructions would pay roughly $35 to fully assemble each EpiPencil.
FDA was quick to warn the public against taking the DIY route, citing the dangers of unapproved prescription drugs which could be contaminated, sub-par, super-par, or counterfeit.