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Ophthalmologists can play a big role in innovation cycle
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Ophthalmology has an admirable history of innovation, both from academic medical centers and private practices. Classical examples include the IOL implant, phacoemulsification, laser surgery of the retina, laser surgery for refractive error correction and intravitreal anti-VEGF therapy for retinal disease, to name a few.
While many innovations have been incubated in research laboratories, a great many have originated from clinicians in the trenches recognizing an unmet need and searching for a solution. I believe the duty of the practicing ophthalmologist includes helping define the problems and unmet needs for vision preservation, restoration and enhancement. The so-called “innovation cycle” requires the input of the clinician, especially when translating basic science from the bench to the bedside. In addition, only practicing clinicians can effectively teach their colleagues how to apply new innovations in their practices, especially when they are surgical in nature. Innovation is the art of introducing something new. Research is not innovation. Basic research applied to an unmet need is innovation. The distance between the two is the translational gap, and crossing this gap requires the investment of significant human and financial capital.
Typically the innovation cycle begins with an idea, but ideas are easy. Translating them to reality is hard. Most inventors start by funding their own initial research in the laboratory, clinic, basement or garage, and this phase can take years to decades. The early money usually comes from friends, family and sometimes a few interested angel investors. Product design, refinement and pre-human clinical testing are daunting tasks. The goal is to get a successful first-in-man outcome, which may often start in blind volunteer eyes. Further refinement and back to the laboratory for more testing is routine, and several iterations may be tested in small clinical trials. If done under the auspices of the FDA, these are phase 1 clinical trials under a PMA or NDA. Many startup companies go offshore for their early clinical trials, but our FDA is much more supportive of starting in the U.S. today than a decade ago. Following successful first-in-man, venture capital or a strategic company partner often funds phase 2 and phase 3 clinical trials that can lead to an approved product and launch. The entire process for a truly innovative product often takes 10 or more years and can cost $100 million-plus for a device and as much as $1 billion to $2 billion for a new drug.
The innovation cycle is a high-risk endeavor. Some studies suggest that for product ideas that enter FDA phase 1 clinical trials, only about 12% ever commercialize. In addition, many are less successful in the marketplace than anticipated, and some are even dead on arrival. One example is Intacs (Addition Technology) for myopia, which was replaced by excimer laser photoablation almost immediately upon approval. Of course, on the positive side, some products generate extraordinary returns, in some cases very unexpectedly. Viscoelastics and botulinum toxin are good examples.
An innovation can be incremental or disruptive. Disruptive innovation can topple industries and create new market leaders. IOLs, laser refractive corneal surgery and intravitreal anti-VEGF agents are good examples. I am often asked what attributes are necessary to bring a new product to market successfully. I have a top 10 list that I look at when I am considering an investment in a startup.
1. The technology must resolve an unmet, poorly met or partially met need.
2. The market size must be adequate, or if an orphan indication, reimbursement must be significant per treatment.
3. There needs to be a well-established delivery channel — in ophthalmology, usually the eye care provider.
4. Some intellectual property or proprietary knowhow to create a “moat” to discourage fast follower imitation.
5. If possible, a low regulatory risk and high likelihood of success; 510(k) is easier and faster than PMA.
6. Minimal entrenched competition.
7. A likely exit strategy through sale to a strategic or an IPO.
8. Quality management and consultants.
9. Quality partners to invest alongside.
10. Access to adequate capital.
There is a No. 11, which in many cases is simply luck, and that is often related to having good timing. Some ideas can be before their time and some after their time. When a disruptive innovation comes to market at just the right time, it can be an extraordinary success.
As a closing thought, it is important to remember that innovation is critical to our country, our profession and our patients’ future success and best interests. The U.S. medtech/biotech and pharmaceutical industries are critical to the U.S. economy. They employ more than 500,000 people in good-paying jobs and spend billions on research and development. In addition, the medtech/biotechnology/pharmaceutical industry along with military/defense products and food are the top three profitable exports for America, maintaining a significant positive balance of trade.
In my opinion, cataract surgery is a perfect example of attaining the triple aim of quality patient outcomes, high patient satisfaction and reduced cost per unit of care through the power of innovation. When I started in ophthalmology 45 years ago, we were doing intracapsular cataract extraction in a hospital operating room with 7 days of inpatient hospitalization followed by aphakic spectacles or occasionally a contact lens. Today, that would cost at least $40,000 per eye. With 4 million eyes per year in the U.S. alone, that would approach $160 billion for a poor outcome and low patient satisfaction. Instead, through the amazing power of innovation, we generate extraordinary life-changing outcomes with high patient satisfaction at less than $2,000 per eye, resulting in more than $150 billion savings per year — by any standard an amazing value for society. To me, cataract surgery with IOL implantation is one of medicine’s best examples of the power of innovation, and we desperately need more as we face the challenges of the future in health care delivery.