Medtronic – missing out on a personalized medicine opportunity, or appropriately cautious?
Medtronic states they won’t be using additive manufacturing to create personalized medical devices any time soon – are they missing out on an opportunity, or do they realize that the opportunity is overstated?
The Medtronic product portfolio is so broad and so commonly used that the company claims to “improve the lives of two people every second” [1] – a figure that includes, no doubt, the millions of Medtronic pacemakers that keep hearts beating around the clock [1]. While the company’s decades-long legacy is rooted in cardiac and vascular devices, its ~$30b in sales, ~$99b in assets, and ~53k patents also include spinal, musculoskeletal, neuromodulation, and diabetes devices among others.
The company has invested heavily in internal R&D capabilities [2] and reported ~$2b in R&D expenses last year [3]. Given this, it is perhaps not surprising that Medtronic is, like countless other companies with physical products developed and produced at high cost, experimenting with additive manufacturing; intuitively, one would expect additive manufacturing to create some opportunity, whether it be in process improvement, cost savings, or portfolio growth – though it remains to be seen if these opportunities bear out.
Today, Medtronic uses additive manufacturing in two primary ways: as a training tool and as an R&D tool. As a training tool, the company prints examples of abnormal physiologies on which physicians can train – essentially, anatomical conditions that are rarely encountered in practice and upon which physicians therefore have limited opportunities to gain experience. As an R&D tool, additive manufacturing allows Medtronic to rapidly prototype devices in the process of development; the company states they are running seven printers non-stop for this purpose, and that development activities that once took months can now take days [4].
These existing applications of machine learning appeal well to the commonly-held belief that additive manufacturing may be somehow easier or more economical than “traditional” manufacturing [5] – and therefore allow Medtronic’s R&D to be less costly. In reality, the shift in processes could have a neutral or even negative impact on economics; in addition to the investment in printing devices, Medtronic must compete for new talent to utilize the machines. There are numerous online postings for additive manufacturing engineer roles at medical device companies, many of which have been up for several months [6] – suggesting a potential, shortage of appropriate talent. Additionally, additive manufacturing, as a newer technology, may present a more “level playing field” for device companies and a loss of existing R&D competitive advantage that large companies like Medtronic may enjoy.
While Medtronic has embraced opportunities to use additive manufacturing in the development of and training on devices, they have explicitly opted to deprioritize the final frontier: personalized medicine, or the use of additive manufacturing to create devices customized to a single patient. On the subject of using additive manufacturing to create personalized devices, Michael Hill, PhD, Medtronic VP of Corporate Science, has said “‘It’s going to take time and determination. It’s one thing to do a prototype, it’s another thing to say we’re actually going to do it for the long haul [4].’” Medtronic’s own website affirms that the company views personalized medicine through additive manufacturing as a longer-term goal that is less addressable than R&D opportunities: “It may be years before those kinds of ideas are fully developed, but 3D printing is already having a major impact on research and development.” [4].
However, this appears to be a missed opportunity when one considers the successes of other device manufacturers – other large device manufacturers are already commercializing personalized devices (e.g., Depuy Synthes), and smaller device and biomatter start-ups are popularizing personalized medicine and in some cases even bringing products to market (e.g., Exovite). By dismissing this potential application of additive manufacturing, Medtronic may be missing out on opportunities to grow their product portfolio, generate incremental revenues, and help patients – unless, however, I am myself falling prey to another commonly-held myth of additive engineering, which is that the technology will rapidly allow for mass customization of products [5]. In reality, it is quite possible that the specific technologies which would allow for customization of products in the Medtronic portfolio (e.g., cardiovascular devices) would be too unproven and risky to use.
Given the number of people in the HBS community with medical device experience, both as device manufacturers and as physicians, I would be curious to hear their comments on this exact point: am I overstating the potential to apply additive manufacturing in a personalized medicine context? And if so, are there any concern about the applications listed above that are already on the market?
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[1] Medtronic. “About Medtronic,” 2018. [Online] http://www.medtronic.com/us-en/about1.html [Accessed: 11 November 2018]
[2] Wasserman. “Medtronic – Top R&D innovators in med tech.” 18 July 2016. Fierce Biotech. [Online] https://www.fiercebiotech.com/special-report/medtronic-med-tech-r-d-report [Accessed: 11 November 2018]
[3] Medtronic. “FY17 integrated performance report.” [Online] http://www.medtronic.com/content/dam/medtronic-com/global/Corporate/Documents/integrated-performance-report.pdf [Accessed: 11 November 2018]
[4] Medtronic. “3D printing: A new frontier in healthcare.” [Online] http://www.medtronic.com/us-en/about/news/3D-printing-at-Medtronic2.html [Accessed: 11 November 2018]
[5] Roca, Vaishnav, Mendonça, & Morgan. “Getting past the hype about 3-D printing,” 2017. MIT Sloan Management Review. [Online] https://sloanreview.mit.edu/article/getting-past-the-hype-about-3-d-printing/ [Accessed: 11 November 2018]
[6] Google. Careers search for “additive manufacturing OR 3d printing AND medical devices” + “Cambridge, MA”. [Online] https://www.google.com/search?q=3d+printing+medical+devices&ibp=htl;jobs#fpstate=tldetail&htidocid=stGhZIMBzNRcK0JbAAAAAA%3D%3D&htivrt=jobs [Accessed: 11 November 2018]
Great analysis. My impression is, like most things medical, entrenched businesses are moving at a cautious (some might say glacial?) pace in terms of new technology. I would argue that the true benefit of additive manufacturing/personalized medicine in many of Medtronic’s successful product lines is yet unproven. However, if Medtronic wants to branch out from its traditional core business lines (pursuing areas like, say, tissue engineering and biomedical scaffolding), I agree with you that a delay in the exploration of the technology could put it at a disadvantage going forward.
Hi,
I enjoyed reading your post. I am curious about the cost of personalized device manufacturing, and I wonder if this is the reason that Medtronic is hesitate to embrace it with full force. Medical device industry competes on cost, and large companies like Medtronic enjoyed significant benefits of economics of scale. Will personalized additive manufacture add up cost per unit significantly so that it trumps the benefit of personalization, especially in the area of cardiac, spinal, musculoskeletal, neuromodulation, and diabetes.
Great article and puts into perspective how advance techniques such as ML / AI / 3D-Printing are disrupting the healthcare field. Having worked in a an integrated healthcare company, I have a view on why it makes sense for Medtronics to continue doing what they are doing. Often embracing such technologies is a slower game for healthacare firms, even though the benefits could be manifold, due to probable risks. In such cases, a business always choses to go deeper into existing business segments and use technology to incrementally add value to existing business. Also we have seen how personalised medicines have had huge benefits only in certain disease conditions – applying the same logic to devices, unless there are tested reasons to belive that personalised devices will add value to the clinical outcomes, Medtronic still may want to avoid the topic.
Your post really made me think a lot. Ultimately I think Medtronic is not being cautious at all, but are acting appropriate to their core market. The killer use case of 3D printing is prosthetics and other biomechanical implants, which as far as I know is not a key expertise of Medtronic. In the field they are playing in – implantable electronics, bioelectronics and surgical instruments, 3D printing adds very little value in manufacturing since the products need not be individualised to the human physiology – at least not from a biomechanics point of view.
A big concern for me is cost and scope of access. Given that additive manufacturing is a relatively new technology, my guess is that it would cost a lot, which means that most healthcare systems would not be able to afford it. Additionally, even if it is materialized, very few people would be able to afford it. I am also unconvinced that the benefit of the technology would be groundbreaking/far-reaching. I would rather healthcare companies invest in technologies that will have greater reach and impact.
From my extensive experience as an intern in the medical device field at a competitor of Medtronics, my initial thought is that its good that Medtronic is taking a slower approach to personalized medical devices. The problem in my mind is regulations because you are putting these devices in people’s bodies. Each one is different so does that mean each one needs new regulatory procedures? Today’s market works because you obtain approval for one product to put in many people’s bodies. If you put different devices in each person, you increase risk of defective products that can cause harm. That would be my primary concern.
I agree with Sterling’s comment that there is huge inertia when it comes to technology advancements in a field like healthcare. The personal nature of the healthcare industry raises the stakes and threshold for technological advances (e.g. in other industries, a flaw in technology might not be a matter of life and death). I thought that one of the most interesting points the author made in this article was the benefit of additive manufacturing as a tool for testing. Medtronic can give themselves a huge competitive advantage if they find themselves in a position where they can prototype products quicker than their competitors. By utilizing additive manufacturing, Medtronic can iterate and enhance their R&D process, without taking on the immediate risk of direct patient contact in the near-term.
From my experience at Medtronic on the Operations side, my biggest concern with personalized medical devices is the regulatory environment. Even for “simple” products like suture and laparoscopic stapling devices, the FDA is incredibly strict about changes in production. Any changes to equipment or processes would typically trigger a re-validation that could take weeks or months. While 3D printing may be useful for producing small components of high complexity, I cannot imagine the FDA allowing significant design changes for patients.
This article made me expand my thoughts on factors to consider when choosing to adopt 3D printing. Instead of only cost/benefit analysis or access to technology, companies like Medtronic have to consider industry-specific limitations. In health care, new technologies can have serious consequences to a customer’s life or health, especially during early adoption. Still, if Medtronic is being too slow to adopt additive manufacturing, they can give their competitors an advantage.
This is an interesting read and raises some valid questions, but the author is right in that he falls for the common myths and hype of the industry. Healthcare companies- Medtronic included use 3D printing as a tech in R&D and few direct personalized healthcare applications. The idea and the tech behind it are quite common, and the best example of this is in dentistry – where doctors have been filling cavities and applying tooth caps with personalized 3D printed inserts for years now. Additive manufacturing as a tool is still evolving and right now cannot provide the economic advantages of traditional mass manufacturing, and Medtronic is right in its decision of not using it where it doesn’t make economic sense. Also, additive manufacturing is just a tool and should not be considered as the great leveler in R&D competencies. Real innovation doesn’t come from just having access to a tool.
It’s understandable that the medical device industry is hesitant to implement 3D printing tech. The materials are still relatively unproven for long-term use. Many nascent 3D printing companies don’t completely understand the amount of research and regulation that goes into approving a new material or manufacturing method for a product in medical or even automotive industry. However, some tangential industries have had success here. I recommend taking a look at NextDent if you have not (https://nextdent.com/), developing materials and systems to print dentures for patients. Understandably, the prospect of using a new method to produce a device that will go into surgery (i.e. knee-replacement) is hotly contested, but Medtronic shouldn’t be too quick to rule out the potential here.
Very interesting article… To your question, I wouldn’t be surprised if Medtronic’s strategy at this point would be to let an upstart tech company (with lower downside of failure) be more at the fore-front. Pushing the boundaries from a regulatory and legal standpoint would potentially impose costs on a large company with a lot to lose. Then once the tech is more proven out, MDT may try to acquire via M&A… effectively using as outsourced R&D in which they wouldn’t own the legal / regulatory risks until they felt that they were sufficiently proven out.
But thank you for the article!