A Commercialization Message

What’s it going to take to bring commercial success to the neurotechnology industry? This is a question that many in this field, including this publication’s editors, have pondered for some time. Now a relative newcomer to the field, Samuel Hall, has devoted a considerable amount of effort to answering the question [see article, p1].

Hall, who works as a financial analyst for Citigroup, devoted his thesis at Princeton University to the topic “Commercializing Neuroprostheses: The Business of Putting the Brain Back in Business.” In the course of his well researched and well written report, Hall recounts several factors that have impeded commercial development of neurotechnology devices, including a couple that are well known to manufacturers in this industry. The inhibitory effect of FDA regulation and the general inadequacy of Medicare reimbursement are not new concepts to vendors in the medical device industry.

But in making his case, Hall charts some new ground. In particular, he points out how FDA regulation of neurotechnology devices poses greater obstacles to manufacturers than does regulation of other devices. In another example, he uses decision theory to analyze the results for both Type I and Type II errors. Much of the general public and the media is familiar with the risk of a Type I error, or false positive. Every time there’s a Dalkan Shield-type problem, we get a reminder. But we need to do a better job of informing the public of Type II errors, or false negatives, at the FDA. If the inappropriate rejection of a new life-saving technology shortens the life of someone with access to no other alternative, this should be an equally enraging decision.

Hall also makes some strong arguments with respect to the regulation of neurotechnology devices compared with pharmaceuticals. The pharmaceutical industry is at least 20 times the size of the medical device industry and it generally serves patient populations that are also several times the size of potential device populations. Regulators should take these disparities into account when considering the cost of clinical trials. The point here is not that neurotech devices should be given a free pass to regulatory approval, just that they should not be lumped with pharmaceutical products in the decision-making process.

Finally, Hall’s recommendation that we more carefully calculate and consider the cost benefits of neurotechnology is one that can only prove helpful to the goal of commercialization. Cyberonics and its research colleagues performed such cost analysis with respect to hospitalization costs associated with epilepsy and is currently looking in similar terms at depression. While much of the regulatory burdens and reimbursement inadequacies confronting our industry are beyond our control, Samuel Hall has done a good job of pointing out steps we can take to bring commercial neurotechnology products to market sooner.

James Cavuoto
Editor and Publisher