On Monday February 1st, Bill Hawkins, Chairman and Chief Executive Officer of Medtronic, Inc. had a fireside chat with the Medical Innovation Fellows at the Medical Devices Center (5th floor Shepherd Labs) on the University of Minnesota's campus (Minneapolis, MN). There were twelve people in attendance and we all agreed that it was a special honor to have two hours of his time. Bill spoke on his history in the medical device industry including his time at CPI, a start-up and how he landed at Medtronic. His candor on being disrupted not once but twice in his career was refreshing. He also covered his thoughts on the most important innovations in the history of medical devices -- the x-ray, pacemaker and Paul Yock's rapid exchange system.
He brought our attention to a $1.7B lawsuit settlement that had made the Star Tribune yesterday: From MPR News: http:minnesota.publicradio.org/display/web/2010/02/01/boston-scientific-patent-disputes/ [St. Paul, Minn. -- Boston Scientific, which has extensive medical device manufacturing operations in the Twin Cities, will pay $1.7 billion to Johnson & Johnson to settle patent disputes. The three disputed patents date back to 2003. They involve drug-eluting heart stents--metal tubes that prop open clogged arteries and release a drug to help keep the blood vessel open. The hefty price tag surprised some analysts, but Jan Wald, an analyst with Noble Financial Group, says the settlement makes sense. Wald says Boston Scientific has made a lot of money off the disputed patents and seems positioned to make more. "The company has been able to generate maybe $6 billion of profits off a drug-eluting stent that it now has to pay $1.7 billion for," she said. Boston Scientific will pay Johnson & Johnson $1 billion Monday and the rest by the first week of January 2011. Some analysts speculate the settlement may spur job cuts, but the company wouldn't comment on the impact of the settlement.]
Interestingly, he told us that one of his first jobs as CEO of Medtronic was to 'deal with' the inter-company lawsuits. He personally met with the CEO's of some of the large companies to try to work together on IP issues. Ultimately, med device companies still sue the pants off of one another but it MUST have been much worse.
He spoke to us about licensing dropped IP to individuals and companies outside of Medtronic - emphasizing the $$ spent to develop technology that did not fit into Medtronic's commercialization portfolio or technology roadmap. We wondered how we could get our hands on available technology and he invited us to search the USPTO and Medtronic's 40,000 patents (big smile).
Bill also spent time discussing the InnoCentive model of innovation (http://www.innocentive.com/) and his thoughts on the future of innovation at Medtronic. Apparently, Medtronic's 40,000 employees are being linked in an innoCentive fashion - to assist in tapping into the talent and expertise across Medtronic's behemoth organization. I started to wonder how to do something similar within the Medical Devices Center - connecting medtech related experts in one centralized portal -- stay tuned.
Along those same lines, he mentioned that he had just returned from the World Economic Forum (www.weforum.org) in Davos-Klosters, Switzerland. Quoting from WEF's website: "The World Economic Forum is an independent international organization committed to improving the state of the world by engaging leaders in partnerships to shape global, regional and industry agendas. Incorporated as a foundation in 1971, and based in Geneva, Switzerland, the World Economic Forum is impartial and not-for-profit; it is tied to no political, partisan or national interests. The World Economic Forum is under the supervision of the Swiss Federal Government." At that meeting, NIKE presented the Green Exchange (http://nymex.greenfutures.com/overview/). I haven't had a chance to study the Green Exchange yet but I presume that it's along the lines of InnoCentive.
The Medical Innovation Fellows picked out the following highlights:
1. Keep your design simple to use and understand. Period.
2. People make all of the difference. Surround yourself with the best.
3. Bill spent a chunk of time discussing Medtronic innovation and tapping into internal expertise. We've heard over and over that large medtech companies do not like to take the risk associated with new technologies and clinical trials; preferring acquisition instead. We wonder if there is change on the horizon?
4. There are more people in China with disposable incomes over $200K than in the United States.
5. Steve Oesterle is going to focus Medtronic's interaction w/academic institutions. What does that mean?
6. Don't take anything for granted.
7. Names to Know: Spencer King (most influential clinician in Bill's life) &
Andreas Gruentzig (balloon angioplasty).
signing off. M