Flashy new medical technology is often cited as a key cause of rapidly rising health care costs. Of course, that hasn't stopped biotech entrepreneurs -- or the investors who finance their ventures -- from pulling on their lab coats and inventing technological fixes for blurry eyes, brittle bones, creaky knees, and nearly everything in between. After all, the 78 million baby boomers are starting to hit the magic age of 65. Keeping all those bodies in good working order represents not just a challenge but an unparalleled business opportunity.
But the looming prospect of health care reform -- with its emphasis on driving down costs -- is beginning to change the way these entrepreneurs both raise funds and market their innovations. No one knows what a revamped health care system will look like. It's all but certain, however, that the system's gatekeepers will be regarding new technologies more critically than ever, which means new risks for small companies betting big on new technologies. "If the government says it is no longer going to reimburse for certain products, they will only get to the subpopulation that can afford it out of pocket," says Terry McGuire, a co-founder and general partner of Polaris Venture Partners in Waltham, Massachusetts, a leading investor in life-sciences start-ups. "And that market may not be big enough for the innovator to make the investment and take the risk."
Indeed, insurers already play a gatekeeping role. "Being able to demonstrate improved outcomes is critical," says Naomi Aronson, executive director of Blue Cross Blue Shield's technology evaluation center, which provides technical assessments to the 39 regional health plans that collectively provide health insurance for 1 in 3 Americans. If start-ups are to make it out of the lab, they will have to "prove efficacy to highest level," notes Aarti Shetty, an analyst with the medical-device team at Frost & Sullivan, a market research firm. "Will it help a wide demographic? Will it have a long-term effect? Is it something that will ultimately cut health care expenditures?"
In the pages that follow, you will find 10 head-to-toe innovations that promise to improve the quality of life for many -- and, in some cases, significantly reduce health care costs. They represent some of the biggest, most important trends in medical technology: "smart" sensors and drug delivery devices, networked health monitoring, tissue regeneration, and robotics. Several of the companies, meanwhile, are pioneering new business models as well. And if the science behind them may be unfamiliar, the spirit of the start-ups bringing them to market -- innovative, focused, fast, and efficient -- is something that entrepreneurs in all fields should recognize.
Each year, more than three million Americans undergo surgery for cataracts -- a half-hour procedure that replaces clouded natural lenses with new, artificial lenses that are available in an increasing range of vision-correcting options. It's the most commonly performed surgery in America, but that doesn't mean it's risk or hassle free. As many as 19 percent of patients experience vision-blurring inflammation after surgery, and the cost of treating sight-threatening postsurgery infections can be more than $20,000. I-Therapeutix, in Waltham, Massachusetts, is focused on making recovery come off without a hitch -- or, for that matter, a stitch. The company, founded by serial medical innovator Amar Sawhney in 2006, has developed a suture-free method for sealing cataract incisions using a hydrogel bandage called the I-ZIP, which is applied with a foam-tip applicator and sloughs off once the eye has healed. It may not sound like much, but investors such as Polaris Venture Partners, which led a $15 million Series C round of financing for the company in June, like the idea of a market of six million eyes a year. Investors are also betting that Sawhney, whose last company, Confluent Surgical, was bought by Tyco Healthcare for $245 million, will hit the mark again.
I-ZIP should be available in the United States by early 2010. Sawhney says he isn't much concerned about reimbursement issues -- for now, he is focusing on "premium" procedures that are largely paid out of pocket. Sawhney is looking at the treatment of glaucoma patients down the road. His plan: rather than patients using daily applications of eye drops -- a regimen fraught with problems of noncompliance and misdosage -- those with glaucoma will get their medication automatically via tiny gel plugs inserted in ducts in the eyelids.
The hearing aid has long been viewed as a signifier of personal obsolescence. No wonder, then, that manufacturers of hearing aids have tried for years -- and without much success -- to make models that fit deep inside the ear, where they cannot be seen. After seven years of stealth development, Newark, California–based InSound Medical appears to have pulled that off. Released in May 2008 and introduced to the public with a high-profile spot on ABC's Good Morning America last July, the Lyric hearing aid -- designed by a team headed by Robert Schindler, one of the pioneers of the cochlear implant -- can be worn 24 hours a day for months at a time, sort of like extended-wear contact lenses. Made of a soft foam material and powered by a proprietary battery that lasts for months, not weeks, the Lyric fits deep in the bony portion of the ear canal close to the eardrum, delivering high-quality sound. Unlike other devices, it can be worn while showering, exercising, sleeping, and talking on a cell phone. A combination of precise fit and antimicrobial agents helps prevent infection.
InSound's business model is also different: With other hearing aids, you buy the device outright (at a cost of about $2,000 and up for each ear for high-end digital models) and expect it to last three to five years. With the Lyric device, users buy an annual "subscription" for about $1,650, which covers replacements, visits to the audiologist, and automatic upgrades when new models come out.
The subscription model makes the first-generation device more expensive than traditional hearing aids. But David Thrower, the company's CEO, is convinced customers will find the added features well worth the price. About 80 percent of the approximately 3,000 Lyric users have reupped for a second year of service. "Most people don't like to get hearing aids," Thrower says. "This is a hearing aid that people really love."
Some five million Americans suffer from heart failure. About a million of them are discharged from hospitals every year -- and 1 in 4 is back within 30 days. That's bad for patients and hugely expensive for the health care system: The cost of caring for patients with heart failure is expected to top $37 billion in 2009, and hospital admissions will account for 80 percent of that sum. Silicon Valley start-up Corventis aims to head off a lot of those readmissions with a system that lets physicians track patients' cardiac health remotely during the high-risk period following hospital discharge. The company's AVIVO system, which became commercially available last spring, equips the patient -- say, someone who has suffered an acute heart attack -- with a disposable sensor that attaches to the chest like a large bandage. It monitors the patient's heart rate, respiration, and fluid status and activity and wirelessly transmits the data to Corventis's Web server. Cardiologists can check in from work, home, and even their smartphones. The goal is to detect irregularities early and treat them proactively -- and less expensively. Plus, the AVIVO system comes relatively cheap: Its current price is $400 to $700 per week.
Cardiac Concepts, in Minnetonka, Minnesota, uses a different kind of monitoring to help the more than 50 percent of heart-failure patients who suffer from sleep apnea, or disrupted nighttime breathing, which can aggravate heart failure. The company is focused on the problem of central sleep apnea, in which the resting brain fails to regulate the body's balance of carbon dioxide and oxygen. People with the condition pass the night swinging between hyperventilation and dangerously shallow breathing, their panicky hearts working hard when they should be resting. Cardiac Concepts's solution: an implanted device that uses an algorithm to sense changes in respiration and stimulates the body to respond -- the mechanical equivalent of a "keep quiet" nudge from a snorer's bedmate. Trials of the device are under way in Europe, China, and the U.S., says CEO Bonnie Labosky. "The regulatory agencies look for safety and efficacy," she says. "Reimbursement people will care about the same thing."
After being severely injured in a car crash 17 years ago, Frank Reynolds, founder and CEO of InVivo Therapeutics, spent years training his body to walk again -- as well as thinking about how to help the 260,000 Americans living with spinal cord injury, or SCI. With innovative technology developed by MIT medical-gadget guru Robert Langer, Reynolds is now tantalizingly close to a solution that will help victims of even the most severe injuries recover bodily functioning -- whether that means breathing on their own or walking again. Already successful in primate experiments, InVivo's spinal cord treatment uses a biodegradable polymer that is injected or implanted into the spinal cord to form a "scaffold" that reduces cell death and scar formation and promotes the survival of neural stem cells, which repair the injured spinal cord. If the technique works in humans, it will be the first effective therapy for SCI, and Reynolds foresees the platform being used in the immediate aftermath of traumatic SCI as well as in cases of chronic paralysis. Given that the lifetime cost of caring for quadriplegics and paraplegics is estimated at about $700,000 to more than $3 million per individual, the potential savings are enormous.
If you haven't heard of interstitial cystitis (or IC, also known as painful bladder syndrome), consider yourself lucky. At least a million women in the United States have the condition. Though it is not life threatening, the condition can drastically affect quality of life. Symptoms such as frequent urination and chronic pain sometimes result in job loss and depression; indeed, the suicide rate among IC sufferers is more than five times the national average. One of the most common treatments for IC requires a visit to a doctor's office to flood the bladder with a drug as frequently as three times a week -- and the results are often lackluster. Taris Biomedical, in Lexington, Massachusetts, is developing a technology that the company's co-founder, Christine Bunt, says will radically alter treatment. Taris's solution: a tiny "pretzel" made of semipermeable silicone tubing that floats in the bladder, steadily releasing the local anesthetic lidocaine in response to osmotic pressure. Initially, the device would have to be removed after a few weeks, but the company -- which raised $15 million in June -- has patents covering a biodegradable version as well. Taris hopes to begin human trials in early 2010.
Some 10 million Americans suffer from osteoporosis, and an estimated 34 million more are at risk because of low bone mass. Eighty percent of those with the disease are women, and the condition makes them susceptible to fractures of the hip, spine, and other bones. Those injuries cost $19 billion in 2005, according to the National Osteoporosis Foundation, a sum that is expected to exceed $25 billion by 2025. One of the most effective treatments for the most severe cases is injections of the parathyroid hormone, which stimulates new bone growth. The problem: The hormone must be injected daily for up to two years to be effective, a regimen that most patients find too demanding to follow. The solution proposed by Bedford, Massachusetts–based MicroCHIPS is to automate the process using an implantable device that is designed to deliver the drug precisely and without fail, day in and day out. Looking something like an Oreo coated in titanium, the device was inspired by the silicon chips used in computing and developed by the company's CEO and president, John Santini, along with MIT professors Robert Langer and Michael Cima. The MicroCHIPS device -- which is implanted under the skin in the abdominal area -- is programmed to administer a dose once a day and will store as much as a year's worth of the drug in powdered form in tiny reservoirs built into the chip. The company, which employs 19 and has funding from a consortium of venture funds as well as medical-device industry giant Medtronic, expects to begin human trials within a year. The market for osteoporosis treatment is expected to be $8 billion to $10 billion by 2010. But Santini envisions future applications of the company's technology that will include implantable "rescue" devices, such as one for diabetics, that would sense low glucose levels and automatically dispense an antidote -- and make a 911 call.
Stroke is the single leading cause of disability in the United States, affecting more than 780,000 people a year. Up to 75 percent of stroke survivors suffer from partial paralysis of an arm, and only 15 percent of those who receive rehabilitation regain full control of the limb. Steve Kelly, CEO of Myomo, in Charlestown, Massachusetts, believes that many of those survivors can benefit from his company's NeuroRobotics bionic arm. Based on technology developed at MIT, the device attaches like a brace to a patient's partially paralyzed arm. When it senses a twitching in the biceps or triceps -- the patient's intention to lift or straighten the arm -- it offers an electronic assist to help complete the motion. The idea is that repetition with the device reinforces the feedback loop between brain and body, helping a patient relearn how to move the affected muscles, even when the brace is off. Physical therapists have been using NeuroRobotics in clinics since 2008, and case studies have shown lasting improvement in stroke victims. Employing just eight people, Myomo has used less than $5 million to bring the FDA-approved device to market; Kelly, a veteran of several IT start-ups, calls it "the most capital-efficient project I've worked on." A pilot program is under way to realize Kelly's ultimate vision: a personal robotics device you can wear around the home as you perform daily activities. Target price: $5,000 or less. "Robotics engineers cringe when I say this, but this is the 21st-century wheelchair," Kelly says. "Except it takes you to a completely different place in terms of what people can do on their own. I think as health care reform takes place, the focus will increasingly include the ability to restore independence and mobility to people in their home. If you can do that with a noninvasive product like this, at the end of the day, you're going to spend a lot less money."
Organovo is working at the cutting edge of regenerative medicine. The San Diego–based company is developing organ-printing technology that CEO Keith Murphy says will usher in a new age of "tissue on demand," built in the lab. Using droplets of "bio ink" made of cells taken from a patient's body, Organovo's bioprinter lays down a three-dimensional pattern that assembles itself into a new organ. The company is focusing first on building arteries to be used in bypass procedures -- initially for the legs, and eventually for the heart. Cardiac bypass procedures now use only so-called native blood vessels taken from another part of the patient's body. The vessels are sometimes damaged in the process, which makes the graft vulnerable to failure. Organovo's technology would give surgeons the advantage of starting with a "fresh" blood vessel that the body will still recognize as its own. The company is testing the technology as a replacement for the synthetic grafts now often used in leg bypass procedures, which must often be redone when they become clogged. But once Organovo can establish the technology in the leg, says Murphy, the company is looking to play a role in the 450,000 cardiac bypass surgeries performed in the U.S. annually. The company, whose co-founder and chief scientific officer, Gabor Forgacs, developed the technology with the backing of a $5 million National Science Foundation grant, is planning to begin animal studies at the University of Wisconsin this year.
Knees do so much for us. and though the benefits of physical activity are undeniable, the active life -- skiing, tennis, Ironman triathlons -- takes its toll. So it should come as no surprise that knee replacement -- surgically subbing in artificial parts for the entire knee or its component parts -- is big business. U.S. orthopedists perform about 500,000 knee replacements a year. About 70 percent of these are in people over 65, but younger patients with mild osteoarthritis are a growing market. It's these younger folks whom Burlington, Massachusetts–based ConforMIS is aiming for. Rather than replacing the entire knee, a procedure that is common in older patients, the ConforMIS system uses detailed imaging scans to create patient-specific implants that "resurface" the joint. And whereas similar systems require the orthopedist to painstakingly shape the patient's bone to fit a handful of available implant models, the ConforMIS system, which has been in use in the U.S. and Europe for about a year, fits the part to the knee. Surgeons using the ConforMIS system complete procedures in 30 percent less time. The company also holds patents for applying the technology to the hip, ankle, and spine. CEO Philipp Lang says the company is in a phase of "aggressive growth," building a sales force to tap into a potential $6 billion global market in knees alone. The pitch appears to have worked on investors. In July, ConforMIS announced it had raised nearly $50 million -- on top of $30 million raised over the past five years.