1. 1 HCMDSS Workshop June 3, 2005 The second half What happens after research is complete? HCMDSS Workshop June 3, 2005 Sherman Eagles – Medtronic, Inc.

2. 2 HCMDSS Workshop June 3, 2005 Barriers Medical device manufacturers resist new techniques and methods No incentives to cooperate Legal and regulatory obstacles to collaboration

3. 3 HCMDSS Workshop June 3, 2005 Factors making MD manufacturers resistant to technology transfer Lack of awareness Conservative nature Short development cycle

4. 4 HCMDSS Workshop June 3, 2005 Lack of awareness Software is not a problem –Far more deaths due to poorly designed human systems (not much change 5 years after IOM report) –Most regulatory actions are due to manufacturing –Most common software error is mis-identification –No data that shows software is a problem Software is not a critical technology –Customers don’t buy software, they buy devices Software is easy

5. 5 HCMDSS Workshop June 3, 2005 Conservative nature Regulatory premarket approval –Don’t change what works Lack of predictability costs lots of money Liability issues –Will always be sued Legacy application –New products are built from previous product

6. 6 HCMDSS Workshop June 3, 2005 Short development cycle Competition –New features sell products Health care cost containment –New products are needed to maintain higher average selling prices

7. 7 HCMDSS Workshop June 3, 2005 Lack of incentive IP is a key asset – not much value in working with researchers if they keep the IP ROI must be greater than alternative ways to spend the money ROI must be relatively short term

8. 8 HCMDSS Workshop June 3, 2005 Legal and regulatory barriers Liability –Responsibility and ownership not clear Anti-trust –No good mechanisms for working with competitors Regulation focused on individual devices, not systems

9. 9 HCMDSS Workshop June 3, 2005 What can we do? Recognize and address the “product” system –Researchers, manufacturers, regulators, legal system, customers and end users Remove or reduce barriers –NGOs or consortium to hold IP and allow competitors to work together –New regulatory models that allow flexibility –Gather data on software problems

10. 10 HCMDSS Workshop June 3, 2005 Develop standards –Manufacturers pay attention to guidance from FDA and EU notified bodies. –FDA and EU rely on standards developing organizations for experience and expertise –FDA and EU participate on SDOs –Support participation by users and academia

11. 11 HCMDSS Workshop June 3, 2005 Provide incentives for manufacturers to adopt research results –Use purchasing power VA network security requirements –Streamline regulatory approvals

12. 12 HCMDSS Workshop June 3, 2005 In Summary Research only gets us half way there We also need to recognize and address the system that creates products and delivers the new research to the marketplace

13. 13 HCMDSS Workshop June 3, 2005 Contact Information Sherman Eagles Technical Fellow Medtronic, Inc 7000 NE Central Ave Minneapolis, MN 55432 763-514-4250 763-514-6197 (fax) sherman.eagles@medtronic.com