business

Joshua Makower has a pressing message for those interested in Minnesota's formidable medical technology industry: Speak up, or face dire consequences.

Makower has the résumé to speak so bluntly about the challenges facing med-tech, which include increased taxes to fund health care reform, greater regulatory scrutiny of new products and the way they are paid for, and a dearth of venture capital funding to develop new technologies.

Currently the CEO of Silicon Valley-based medical device incubator ExploraMed Development, Makower is a medical doctor with an MBA from Columbia University and an engineering degree from the Massachusetts Institute of Technology. He has founded -- and successfully spun off -- three med-tech companies, most recently Acclarent Inc., which was sold to Johnson & Johnson for $785 million last year. He's also a professor at Stanford University who co-founded the institution's Biodesign Innovation Program, and holds more than 100 medical device patents. (One company he founded, TransVascular Inc., which developed a coronary catheter technology, was sold to Fridley-based Medtronic Inc. for $60 million in 2003.)

At a luncheon held by industry group LifeScience Alley on Wednesday, Makower said med-tech is facing a "perfect storm" of events that could erode U.S. dominance in med-tech, a phenomenon that could trickle down to Minnesota, home to more than 200 medical device firms. He urged the approximately 200 attendees to get involved by calling their elected representatives, as well as groups lobbying on behalf of the industry.

FDA leadership a concern

One area of concern for Makower and others is the recent change in leadership at the Food and Drug Administration (FDA), which regulates medical devices. New Commissioner Margaret Hamburg and the chief of its device division, Jeffrey Shuren, are "trying to the right thing, and what they believe the public wants." But industry's voice in the regulatory process -- where medical devices are reviewed and approved for use in patients -- is often seen as nefarious.

"We need to tell them that our work involves innovation," he said.

The FDA approval process for medical devices has grown shockingly complicated and drawn-out, he said. When asked if anyone in the audience had experienced delays in getting a device approved, more than half of those in the room raised their hands.

In addition, the Institute of Medicine is reviewing the FDA's controversial, but commonly used, 510k review process. Critics say more clinical studies are needed before devices are cleared; the industry believes the process works fine. It is unclear what impact the Institute's report will have on the approval of medical devices.

Health care reform poses another area of concern, especially since it will likely include a $20 billion tax on medical device firms. While it's difficult to handicap how reform will shake out, Makower said there appears to be a mind-set among some lawmakers and others that medical devices are not cost-effective therapies.

"We're not to blame for big costs," he said. "If anything, we're guilty of prolonging life and improving the quality of life for millions of people."

With all these challenges, it's no wonder that venture capital funding for medical devices dropped to $2.5 billion last year, down from $3.4 billion in 2008. "The game-changers [for new devices] are the ones the venture capitalists are the most scared of funding," he said.

Janet Moore • 612-673-7752