Medical Devices

Bionx Implants Inc. shot its way into the stock market in April 1997 with a product called the Meniscus Arrow, which investors and analysts seemed to think had tremendous potential for profitability. Analysts estimated that the medical-devices company in Blue Bell would reach $33 million in revenue this year, compared with only $5 million in 1996. Bionx stock reached a high of $31.88 in February. But when the company announced in March that it expected its sales for the first two quarters to be $1 million to $2 million less than originally anticipated because of increased competition, the sell-off of its stock began.

Generic competition - a billion-dollar problem for brand-name drug companies since the 1980s - is making inroads in the orthopedic-medical-devices industry. Last week, Cardinal Health Inc., one of the three biggest device wholesalers, said it was increasing its offering of lower-cost products for broken bones. This nascent trend, borne of increasing pressure to control health-care costs, represents a direct threat to brand-name device-makers, such as West Chester-based Synthes, which was bought in June by Johnson & Johnson for $19.7 billion.

Makers of various medical devices violated federal law by not reporting seven deaths and more than 100 serious injuries associated with their products in recent years, a consumer group alleged yesterday. The Public Citizen Health Research Group, founded by Ralph Nader, also criticized the Food and Drug Administration for failing to prosecute any companies for violating the reporting law, which took effect in late 1984. FDA documents obtained by the group indicated that 35 companies did not report seven deaths, 109 serious injuries and 265 malfunctions related to their products between December 1985 and June 1988.

The Supreme Court stripped away a key consumer health protection for Americans last week by granting legal immunity to makers of federally approved medical devices, such as joint prosthetics, breast implants and defibrillators. As a result, injured patients who want to sue for damages in state court are basically out of luck. The impact from the high court's decision was immediate. Hours after the ruling, a state court judge in Florida asked attorneys with cases involving Johnson & Johnson's drug-coated Cypher heart stent whether the lawsuits should continue.

The emerging market for generic medical devices is the backdrop for a legal fight between Synthes Inc., and several former employees who created a company to sell similar products for less money. Headquartered in Switzerland but with facilities in Chester County, Synthes is a global leader in selling plates, rods, screws, and power tools to fix broken bones, which is why Johnson & Johnson has agreed to pay $21.3 billion for Synthes. Yearly global medical-device sales amount to about $300 billion and, with aging populations in developed nations, the market isn't going away.

Johnson & Johnson Inc.'s growing reliance on medical devices over pharmaceuticals paid off in the second quarter, helping to boost revenue 11 percent over a year earlier, the company said yesterday. J&J, which is based in New Brunswick, N.J., and has several subsidiaries in the Philadelphia area, said net income rose to $2.68 billion, or 89 cents a share, from $2.46 billion, or 82 cents, in the same period a year ago. The growth was powered mostly by a 20 percent increase in sales of medical devices and diagnostics, to $4.9 billion.

It's a phenomenon nearly everybody has experienced: You turn on the hair dryer, and suddenly there's snow on the TV set. Or you're using your cellular phone and you unexpectedly pick up local radio, or a stranger's conversation. It's called electromagnetic interference (EMI), and it refers to the fact that electrical devices emit electromagnetic energy that can interfere with other devices. Most of the time, this is nothing more than a momentary annoyance. However, if the device being disrupted is a piece of life-saving medical equipment - say, a pacemaker - the potential consequences can be far more serious.

More than 200 years ago, America's greatest patriots convened to write a document that would empower us all with inalienable rights, liberties and freedoms. But on this past Monday in Philadelphia, the cradle of the Constitution, drug and medical-device companies met to unilaterally rewrite this contract and remove one of its most important pillars: the right to trial by jury. And to pour salt on the wound, a high-ranking official inside the Food and Drug Administration, the government agency tagged with protecting the public from dangerous drugs and devices, was a featured speaker at this meeting.

Synthes Inc. handpicked the surgeons. The West Chester maker of orthopedic products also paid for the doctors' travel to training sessions in San Diego and Charlotte, N.C. There, company employees explained how to use their new bone-mending cement to fix a type of spinal fracture that afflicts hundreds of thousands of people yearly, most of them elderly. Federal prosecutors alleged in an indictment of the company last week that these training sessions were a dangerous, illegal, and less expensive substitute for clinical trials required by the Food and Drug Administration.

One year ago, Penrith Corp. was a small maker of medical devices in Plymouth Meeting trying to get its wireless ultrasound system through the regulatory approval process after six years in development. Today, now part of the giant Siemens Healthcare , the operation is preparing to launch what is called the Acuson Freestyle from a 12,000-square-foot facility in a commercial office park near I-476. Siemens Healthcare CEO Gregory Sorensen , a former professor of radiology at Harvard Medical School, said a wireless handheld device should appeal to doctors who use systems in which the transducer is connected by a cord and can be "cumbersome and difficult to use. " But Sorensen emphasized that when the first Acuson Freestyle units are shipped from Plymouth Meeting shortly, Siemens will pay a 2.3 percent excise tax on each, thanks to regulations that took effect related to the Affordable Care Act of 2010.

One year ago, Penrith Corp. was a small maker of medical devices in Plymouth Meeting trying to get its wireless ultrasound system through the regulatory approval process after six years in development. Today, now part of the giant Siemens Healthcare , the operation is preparing to launch what is called the Acuson Freestyle from a 12,000-square-foot facility in a commercial office park near I-476. Siemens Healthcare CEO Gregory Sorensen , a former professor of radiology at Harvard Medical School, said a wireless handheld device should appeal to doctors who use systems in which the transducer is connected by a cord and can be "cumbersome and difficult to use. " But Sorensen emphasized that when the first Acuson Freestyle units are shipped from Plymouth Meeting shortly, Siemens will pay a 2.3 percent excise tax on each, thanks to regulations that took effect related to the Affordable Care Act of 2010.

NEW YORK - Pharmaceutical companies are pleased that health-care reform means more patients have insurance and will be encouraged to take their medicine to avoid costly hospitalizations. But, as Johnson & Johnson chief executive officer Alex Gorsky said Tuesday, drugmakers want private insurers or government programs such as Medicare and Medicaid to pay them for those drugs at a prices closer to their choosing. "Be aware," Gorsky said, that cost-containment efforts must "ensure we continue to reward innovation," or risk not having new drugs to treat health problems.

Two small medical-device companies in the Philadelphia region were able to squeeze through the snug financing window last week. Rosetta Genomics Ltd. went the equity route to raise gross proceeds of $27.5 million, while Echo Therapeutics Inc. pursued a debt deal that would allow it to borrow up to $20 million. Both unprofitable companies need the capital to commercialize products under development. Rosetta Genomics, with corporate headquarters in Israel and laboratories in West Philadelphia, completed a secondary public offering of 5.5 million shares at $5 per share.

Generic competition - a billion-dollar problem for brand-name drug companies since the 1980s - is making inroads in the orthopedic-medical-devices industry. Last week, Cardinal Health Inc., one of the three biggest device wholesalers, said it was increasing its offering of lower-cost products for broken bones. This nascent trend, borne of increasing pressure to control health-care costs, represents a direct threat to brand-name device-makers, such as West Chester-based Synthes, which was bought in June by Johnson & Johnson for $19.7 billion.

Daniel Adam Schultz, 38, of Rosemont, a civil engineer, sportsman, and father of four, died at home Friday, June 22, after a 23-month battle with sarcoma. Since 1998, Mr. Schultz had been with ASTM International. The not-for-profit organization develops standards for metals, paints, plastics, medical devices, electronics, and other industries, and for consumer products. Mr. Schultz had been involved in ASTM projects in several countries and in 2005 spent 10 days in South Korea and Japan at meetings involving standardization issues in the areas of medical devices and aviation.

The emerging market for generic medical devices is the backdrop for a legal fight between Synthes Inc., and several former employees who created a company to sell similar products for less money. Headquartered in Switzerland but with facilities in Chester County, Synthes is a global leader in selling plates, rods, screws, and power tools to fix broken bones, which is why Johnson & Johnson has agreed to pay $21.3 billion for Synthes. Yearly global medical-device sales amount to about $300 billion and, with aging populations in developed nations, the market isn't going away.

Johnson & Johnson chief executive officer Bill Weldon, 63, will retire in April, after a string of product recalls that have embarrassed the health-care giant in recent years. Alex Gorsky, 51, one of two vice chairmen, will succeed Weldon at the company's annual meeting. Gorsky edged out fellow vice chair Sheri McCoy for the top spot with the company, which had $65 billion in sales with such names as Band-Aids and Tylenol, along with medical devices and pharmaceuticals. The last big acquisition on Weldon's watch - and one of the biggest in health care in 2011 - was the as-yet-unfinalized $21.3 billion takeover of the medical-device manufacturer Synthes Inc., which has operations in Chester County.

WASHINGTON - To head off medical conflicts of interest, the Obama administration is poised to require drug companies to disclose the payments they make to doctors for research, consulting, speaking, travel, and entertainment. Many researchers have found evidence that such payments can influence doctors' treatment decisions and contribute to higher costs by encouraging the use of more expensive drugs and medical devices. Consumer advocates and members of Congress say patients may benefit from the new standards, being issued by the government under the new health care law. Federal officials said the disclosures increased the likelihood that doctors would make decisions in the best interests of patients, without regard to the doctors' financial interests.

Company lawyers and outside counsel for Synthes Inc. have been busy lately, filing lawsuits against former employees and some of the companies that have hired them, and alleging raids on staff, breaches of confidentiality agreements, and violations of patents. The litigation might soon be the concern of global health-care giant Johnson & Johnson. During a recent meeting at the Synthes headquarters in Switzerland, shareholders approved a $21.3 billion takeover by J&J, which is based in New Brunswick, N.J., and has operations in the Philadelphia area.

NEW YORK - With age come such things as catheters, colostomy bags and adult diapers. Now add another indignity to getting old - having to drop your pants and show those things to a complete stranger. Two women in their 80s put the Transportation Security Administration on the defensive this week by going public about their embarrassment during screenings in a private room at Kennedy Airport. One said she had to lower her pants and underwear in front of an agent so her back brace could be inspected.