Sharps Safety Products Often a Team Effort
Edition: July 2002 - Vol 10 Number 07
Author: Mark Thill
The next time a customer gasps at the price of a sharps-safety product, tell him or her this: What looks like some plastic, metal and ink, is actually the end result of hours of brainwork and engineering time. After all, these aren't ballpoint pens we're talking about.
That's right. Those sheaths, push-buttons and other doo-hickies that make sharps safe to use are protected by patents. And it's entirely possible that the manufacturer whose name is on that syringe or blood collection unit had to pay for the right to use the technology from someone else. Here are a few examples:
In June 2002, Becton Dickinson and Company began selling a syringe with a retracting needle that is royalty-bearing under a license agreement with Ventura, CA-based Med-Design Corp. The BD Integra Syringe with Retracting PrecisionGlide Needle is said to be the first retracting needle syringe that uses an interchangeable needle. A year prior to that, BD announced the BD Autoguard Pro shielded IV catheter, incorporating Med-Design's spring-based technology, which automatically retracts the insertion needle into a shielded housing as it is withdrawn from the catheter.
In May 2002, Kendall initiated its U.S. market launch of the Monoject Magellan line of safety syringe needles, based upon the FlexLoc® safety needle technology created by Bountiful, UT-based Specialized Health Products International (SHPI). It was the first commercial product available based on the FlexLoc® technology. Later that month, the two companies signed a new agreement covering safety blood collection products.
Effective March 28, 2002, Smiths Medical (owner of Portex Inc.) gained the right to distribute several sharps safety products from Futura Medical Corp., a subsidiary of Medisys plc. The products will be labeled Portex, but will be known as the Futura® line of safety products, i.e. Futura® Safety Lancet, Futura® Safety Scalpel, and Futura® Safety Syringe. The agreement allows Portex to build upon Futura's established success with this product line, says a Portex company spokesperson.
In January 2001, SHPI entered into a License Agreement with South Jordan, UT-based Merit Medical Systems, a manufacturer and marketer of products used in diagnostic and interventional cardiology and radiology procedures.
Also last year, Plymouth, MN-based MedAmicus signed a licensing agreement with Med-Design whereby MedAmicus would manufacture and distribute the Safety Seldinger Needle into the arterial access market. In October 2001, the two companies signed an agreement that allows MedAmicus to market Med-Design's technology to companies specializing in angioplasty, angiography, stent placement and other arterially performed procedures using guidewire access.
There's nothing new about licensing other companies' technologies, although the current focus on sharps safety has heated things up a bit. A typical scenario finds a large company with manufacturing and marketing muscle such as BD incorporating into its products technology that is royalty-bearing to a small company such as Med-Design which prefers to stay away from the manufacturing and marketing wars.
Founded in 1990, Med-Design has developed technology related to 38 safety needle products with applications in blood collection, infusion therapy, venous and arterial insertion, and injection. The company has a portfolio of issued and pending patents protecting its proprietary safety needle technology, including 17 U.S. patents issued, 16 foreign national patents, and one European patent covering 12 countries, and numerous patents pending in the U.S. and internationally.
''Our company started almost as a garage shop operation,'' says Michael Simpson, Med-Design's chief strategy officer. ''A couple of engineers came up with an idea for retracting a needle back into a shield, thereby protecting sharps. They were ahead of themselves. They had a technology in search of a market.'' The company was ultimately bought by an investment banker who saw the value of the technology after his own child was hospitalized and exposed to many sharps. He took it public in 1995.
Med-Design's strategy is simple: share its sharps-safety technologies with companies that can bring them to market. ''IV catheters, blood collection needles and syringes are huge commodity markets,'' says Simpson. ''There are billions of units out there. Even if we had the greatest technology in the world, attempting to compete with the [market share leaders] isn't possible.'' To compete on price would be out of the question as well, given the big companies' marketing and manufacturing expertise. And to compete on technology would force a company such as Med-Design to hire a sales force and jump into the market. ''But our intent is to keep the company small,'' says Simpson. So the company made the strategic decision to license its technology to others.
In addition to its agreement with BD, Med-Design has found success in the pharmaceutical market as well, a market that is more familiar with co-promotion and co-marketing agreements, adds Simpson. For example, Med-Design provides safety devices that deliver Abbott Labs' pre-packaged injectable drugs . The two companies are jointly promoting the product. ''That's new for us,'' says Simpson. ''It's a lot of business-to-business selling.''
Meanwhile, why would a giant like BD incorporate safety-sharps technologies that are royalty-bearing to another company? After all, BD has invested half a billion dollars over the past 10 years on developing safe-sharps products, taking into consideration capital equipment, human resources, and technology development, acquisition and licensing, etc.
''The broad needs of clinical practice in the area of safety requires a company such as BD to make available a wide range of technologies,'' says Dean Paranicas, vice president of investor relations and public affairs. ''BD's approach is to use a variety of means to develop and introduce products in this area.''
Kendall and SHPI
Tyco Healthcare's Kendall division has found the same thing to be true. In May 2002, the company launched the Monoject Magellan line of safety syringe needles, based upon the FlexLoc® safety needle technology created by Specialized Health Products International. Later that month, the two companies signed another agreement covering safety blood collection products. The FlexLoc® technology comprises a built-in safety device that covers the needle after use.
The agreement works for SHPI too. ''SHPI's primary role was that of engineer and product designer, while Tyco's role was that of manufacturer,'' says SHPI President and CEO Jeff Shoinski. ''A major portion of the engineering analyses was performed by SHPI,'' he says. ''SHPI and Tyco worked together closely through focus groups and simulated use studies to refine the design to conform to the many identified clinician needs and develop the product so that it is suitable for high-speed, high volume manufacturing.''
Although SHPI has begun making safety-sharps products on an OEM basis for other manufacturers, including Bard Access Systems, the company believes that its ''core competency resides in early needs identification, innovation, design and development of safety needle products,'' says Soinski. ''Obviously, to build and establish a sales team of sufficient size to sell our products would require an enormous expense and risk. Large medical companies already have established, reputable sales and marketing organizations, which will meet the immediate and long-term sales needs of our products.''
Another company familiar with sharing technology with others is Portex. For example, it has held the exclusive US distribution rights for Portex-labeled Sharpsafe® sharps containers since the mid-1980s, licensing the manufacturing of some models, while purchasing other models directly from Frontier Medical in the United Kingdom, says Brenda Beauchamp, director of marketing, global needle safety and arterial blood sampling products. Another example is the Point-Lok® device, which was manufactured by Griff Industries, but was sold as a Portex product. In August 2001, Portex purchased the sales and marketing rights to that product.
''Portex welcomes opportunities for joint development with any sharps company,'' says Beauchamp. ''Our agreement with Futura allows future joint development of sharps safety products. Futura has many new safety products in development, and Portex will have the rights to distribute many of [them]. Portex, as well, has many new safety products in development.''
Not for Big Companies Only
Big manufacturers, such as Kendall and BD, aren't the only ones incorporating technology from other companies into their products. The strategy makes sense for small manufacturers too. MedAmicus, for example, has two licenses with Med-Design one for a basic Seldinger needle for guidewire placement; and the second for vessel introducers (for catheter therapy).
''We're in a market that uses 10 million needles a year, not billions,'' says MedAmicus President and CEO Jim Hartman. The company is primarily an OEM manufacturer for such companies as Medtronic and Boston Scientific. Were it not able to license technologies from other companies, it would be forced to ''go through significant design work to come up with unique products, and that may not always be practical,'' says Hartman. For example, MedAmicus lacks in-house expertise on sharps-safety products.
Given the attention that the federal government and labor unions are paying to the sharps-safety issue, there's little doubt that the demand for these products will continue to climb. If that's the case, manufacturers will continue to seek out and pay for the latest sharps-safety technology wherever they can find it.