Jerry S, one of our friends in the medical device market, was recently asked a question that many others out there have also probably had:
I have an idea for a medical appliance that I do not believe is currently on the market. I have no engineering background and have no idea where to start to get this idea evaluated, mocked up, and potentially marketed.
I know there are web sites that promise to promote inventions but I’m squeamish about them. Does anyone have any ideas of where I might go to get the idea looked at and potentially developed? (If it helps any, the idea is in the area of respiratory care.)
Here’s what Jerry had to say in response:
I can give you the perspective of a medical device inventor with almost 40 years in the medical device industry.
First you need to come up with a sufficiently vague description of your invention so that you can talk about it without losing key patent rights here or abroad. For a “ball-park” quick estimate of the viability of this idea, you can follow these steps.
You need to see if the idea is for a “must-have” or “nice-to-have” product. If it’s the former, talk to several potential customers about what the product does, how it would help the patient, why it’s better than existing products, how much the potential customer would be willing to pay for the device, whether there are similar products already cleared for marketing by the FDA, whether the use of those other products in a medical procedure has been assigned a CPT (Common Procedural Terminology) code by the AMA (American Medical Association), how long it will take to perform this procedure, whether insurance companies (called third party payers, and including Medicare) will pay (reimburse) the healthcare provider for performing the procedure and how much the reimbursement is in, say, Manhattan, NY (one of the highest reimbursed regions in the US.) You may have to guess at the manufacturing cost of a device you have not designed yet, but if there is a similar device on the market and it’s not too complex, you could guess that cost as less than 20% of the selling price.
If your idea is for a single-use disposable device, you will need to calculate if its delivered cost is significantly less that the “technical component,” or TC, of the reimbursement amount. Finally you will need to calculate if use of your disposable device is worth the doctor’s time, especially if you are going to try to influence them to use a procedure involving your device instead of another procedure using a competitor’s existing device; you calculate the “return on time” (R.O.T.) by dividing the professional component (PC) of the reimbursement by the time to do the procedure. If you are likely to achieve at least as good a clinical result as existing equipment but with a higher R.O.T. then doctors are more likely to use your invention.
If your idea is for capital equipment that the doctor buys, then you need to calculate how many times a week that equipment will be used, how much the total reimbursements (TC + PC) will be per week, and calculate how many weeks it will take the doctor to break even. Many doctors in private practice are happy to break even in a year. You will still need to calculate the R.O.T. for your device versus the competition (where now you use both components of the reimbursement in the calculation) and show the doctor an advantage.
Again, this is very rough estimate, given that your product idea is not a costed-out design. But if the quick analyses above indicate that you will have an advantage over your competition and that you can generate enough revenue to support a company (or other options), it will be worth taking the next step and consulting a patent agent or attorney to protect your idea, and the folks that can turn the idea into a product.
Of course, Jerry didn’t have much information to base his answer on, but he offers a lot of great insights for entrepreneurs considering the feasibility of a medical device venture.
Related Services: Market & Competitor Research & Analysis.