Initial steps for physician entrepreneurs

Every time I see a GlideScope, I can’t help but lament, “why didn’t I think of that?”  To me, the GlideScope exemplifies how physicians can apply their practical knowledge of medicine to create technology that improves patient outcomes.

I had a front-row seat to physician-designed technology prior to my residency, when I worked at an early-stage venture capital fund advising on health care investments.  We invested in a number of physician-founded companies, and the physicians I met were both inspiring and visionary.

Unfortunately, despite their medical expertise, most of these physicians had never been educated on the initial steps towards building a concept into a company.  Nothing frustrated me more than seeing promising technology, which may have actually helped patients, stall due to simple, avoidable pitfalls.  When we met with physicians who hoped to commercialize their innovations, many sought advice on buzzwords like market size, regulatory pathways, or the reimbursement landscape.

Instead, before considering any of these more complex topics, we ensured they could answer four vital questions to confirm that the foundational idea was solid and that all of these other paths were even worth pursuing.  I think of it as the Mr. Miyagi approach: get your basics down first.  I have listed these four, initial considerations below in hopes of helping others avoid some of the most common pitfalls.  I have a surgical bias, so I focus my explanations on medical devices, but these principles can apply to any healthcare innovation.

1. Does it already exist?  It seems obvious, but ensure that a comparable device is not already available.  Start with a thorough Google search, check catalogs of major companies, exhaust PubMed, and without disclosing your idea, canvas your colleagues, scrub techs, and members of your hospital purchasing committee about similar technologies already available or in trial.  Next, use either Google Patents or visit the U.S. Patent and Trademark Office website to assess the novelty of your concept.  When searching, try a multitude of different keywords describing not just the device itself, but also outcomes achieved via the device, to see if a similar idea is already patented.  Even if you do not understand the legal jargon, scroll through the figures of your search results to gain a sense of what exists.  If there are similar devices available, ensure that your device is different enough or better enough to warrant the time and cost of commercialization.

2. Is it actually your idea? If you are employed by an academic institution, research facility, or hospital, your contract may include language stating that your employer has rights to any innovations you create within the scope of your employment.  Even if you created your technology on your own time, this can become an issue if your employer feels you used their resources to develop it.  If your institution claims certain rights to your innovations, this should not discourage you.  Most institutions will encourage monetization of employee innovations through licensing in order to profit from them.  The key is to speak with the relevant parties early on and to be aware that you may need to involve other entities when moving your product forward.  This is also true for inventions created in collaboration with others.  One way to clarify ownership in collaborations is to have all inventors assign their rights to a single company.  This avoids having co-inventors potentially compete.  Either way, figuring out those relationships early on will save you a lot of hassle down the line.  I saw more than a few inventors who later realized they did not exclusively own their technology.  If you are unsure, many academic centers have technology transfer offices that you can speak with, or you can ask human resources at your workplace to point you in the right direction.

3. Is your idea protectable? In the health care space, often it is the ideas that are valuable, and patents will help to capture the most value from them.  Until you protect your innovation, do not publish any information related to your product concept and do not openly discuss it with anyone who is not part of your company.  Publishing a manuscript in a journal, discussing the research behind your innovation at a conference, or even brainstorming with a colleague, can constitute what lawyers call a “disclosure” and may jeopardize your ability to protect your innovation.  If you decide to pursue your idea, invest in a reputable patent attorney who has experience in the relevant field of technology.  With recent changes in U.S. patent law to a “first to file” system, timing is important.

For a device, two types of patents apply.  You can file for a utility patent to protect the device itself or a method of using a device, or you can file a design patent to protect the outward appearance of the device.  You do not need to initially file a full patent application, but rather, many inventors will file a provisional application first.  This protects the date of your invention for one year, but costs less and buys you time to determine whether you will move ahead fully with your technology.

4. Does your product save time, money, or lives? Before committing your time and energy to pursuing a concept, be sure you can easily articulate the economic argument for developing it.  This is the most common mistake physician entrepreneurs make.  Many physician entrepreneurs are able to define the clinical benefit of their innovation, but cannot explain how they will get paid for it.  You do not need to have detailed business plans or Excel spreadsheets, but you must have a general concept of how the device will generate profit.  For some products, you may need to consider issues like cost to manufacture and produce the item, or the cost to obtain FDA approval, but before even addressing these issues, you must have a clear clinical and economic argument.  Before considering commercialization, ask yourself questions like: does your product save enough time to allow for an extra procedure per day?  Is it more cost-effective than your competitor’s technology?  Or, does it provide such a meaningful impact on patient outcomes, such as preventing readmissions, that it can command a higher price?  In general, with the current environment of decreasing reimbursement and constrained budgets, technologies that provide cost savings will be favored by physicians and purchasing committees alike.

Once you have clear answers for these questions, you can move onto more complex topics like the optimal regulatory pathways, what types of trials may be required, and reimbursement strategies, but addressing these initial questions first will often inform these later considerations.

Manan Shah is a physician who blogs at MananMD.com. Arlen Meyers is a professor of otolaryngology, University of Colorado, Aurora, CA  and founding president and CEO, Society of Physician Entrepreneurs

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