Medtronic: Doing Just What the Doctors Order

Article preview from IN VIVO-  June, 2010

Medtronic has recruited physician opinion leaders for strategic management positions in most of its operating divisions. The company believes this strategy will help bring them closer to customers and expedite the bedside-to-bench process for developing new products.

Medtronic: Doing Just What the Doctors Order

Article preview from IN VIVO-  June, 2010

** Device companies have traditionally hired physicians to serve as chief medical officers, who focused largely on clinical and regulatory issues.

** Medtronic is aggressively expanding the role physicians play in the company's operations by hiring clinical thought leaders for key executive positions with operational and strategic, not just clinical, responsibilities.

** The company believes this strategy will help spur innovation and bring them closer to their customers.
** By adopting this approach, Medtronic is testing how critical clinical expertise is to commercial success.

Physicians have always played a much more critical role in the medical device industry than they do in biopharmaceuticals. While new drugs can be created by scientists in a lab without any physician involvement, few significant device innovations have been developed by engineers alone working on a benchtop. Indeed, most of the ideas for new device technologies have come, directly or indirectly, from physicians themselves. The very nature of devices necessitates that close physician-industry interaction, as devices require the skill of a clinician to have a therapeutic effect, whereas drugs do not need the doctor as an intermediary.

As a result, device companies have long maintained relationships with physicians in their respective clinical areas, typically in the form of a clinical or scientific advisory board and as consultants. Indeed, that is why the device industry has been particularly concerned with recent government regulatory efforts that are aimed at reducing conflicts of interest between physicians and product companies, because of the affect that more rigorous regulation may have on the traditional innovation process.

More recently, device companies – particularly the larger players – have also started recruited leading physicians to key corporate positions. Many of these companies have long had chief medical officers or physician executives with similar titles and responsibilities, but the duties of these positions have generally focused on clinical, not business, issues. Among these are clinical trials and certain regulatory areas, in addition to playing the role of physician liaison, including representing the company at clinical meetings. These jobs also have traditionally been occupied by clinicians who made the decision early in their careers to focus on industry, rather than clinical practice.

That trend is changing, however. Companies have increasingly begun to recruit leading physicians, some with long distinguished careers in academic medicine, to join the ranks of industry to take on responsibilities that extend beyond just clinical issues. Indeed, these physician executives are being given operational duties, including running large business units, and strategic functions.

Medtronic Inc. was one of the first companies to employ this strategy when it hired legendary physician executive, Glen D. Nelson, MD, in 1986, who became vice chairman, and upon Nelson's retirement, brought on Stephen Oesterle, MD, as senior VP of medicine and technology in January 2002. A long-time leading interventional cardiologist, Oesterle had previously been at both the Stanford University Medical Center and Harvard Medical School. A few years later, the late Donald Baim, MD, left Harvard to join Boston Scientific Corp.; and Cordis Corp., a Johnson & Johnson company, recruited Campbell Rogers, MD, from Harvard and David Kandzari, MD, from the Duke University Medical Center. (Kandzari left Cordis in 2008 to join the Scripps Clinic.) ( See "Remembering Donald Baim," IN VIVO, January 2010.)

Nelson's and Oesterle's work and presence at Medtronic spurred the company to recognize the value that academic physicians could deliver, not just as clinical advisors and consultants, but as senior executives, contributing directly to business operations. As a result, Medtronic has been at the forefront in recruiting a number of leading academic physicians from a number of clinical specialties to join the company in key strategic management roles at several of its divisions. That is in addition to the nearly 60 physicians employed in various other positions throughout the company. Medtronic executives believe having these physicians in important operating roles not only helps the company get closer to its customers, but also expedites the product development process.

- Stephen Levin

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