In bringing its new Resynchronization Cardiac Therapy Defibrillator (CRT-D) to market, Medtronic has done more than help save people from dieing of heart failure.
It has shown how to open markets in the new world of cost-conscious health care.
The key study in the development of CRT-D was done in Canada, and is published today in the New England Journal of Medicine.
Called the Resynchronization/Defibrillation for Ambulatory Heart Failure Trial (RAFT), it showed heart death could be cut 27-29% with the new device, which would replace regular defibrillators and drug therapy.
It's a big market, and the new devices carry a high price -- $50,000. That's twice what previous devices cost. It goes into a market estimated to be worth $40 billion per year. How is this going to be funded, and who is going to pay for it?
These are important questions, which is why having RAFT done in Canada, with its province-based health care system and pressure for cost-effective solutions, is important. Medtronic has also opened a European portal aimed, it says, at stimulating innovation. It's also aimed at selling Medtronic gear in Europe.
This is not how it used to be even a few years ago.
Back then you got U.S. approval first. This gave you a license to sell to clinics and hospitals. Federal programs like Medicare and private insurance were immediately under enormous pressure to approve payments on your new invention.
It was considered much more difficult to get into Europe or Canada, where new gear not only had to prove it worked, that it delivered better results than alternatives, but that it was also cost-effective, that it would not break the bank.
Multiply $25,000 -- the difference in price between this and previous defibrillation devices -- by the 6 million American sufferers of heart failure alone -- and you see the problem.
But what if this reduces hospitalizations? What if it lets people actually go back to work?
Medtronic is far from home free. RAFT showed an increase in "adverse events" shortly after implants, because there are more wires or leads to connect with the new technology. Increased risk, plus increased cost, could be fatal. Proper training on installation is required. That education will cost money, lengthening the payback time again.
But this is the way it is going to be, and American medical device makers are playing the game by its new rules. They're also out to win the game, and I wouldn't bet against them.
Not with my own heart on the line. Given my family history and high cholesterol count, I am very much hoping Medtronic can accomplish its goals.