A Tale of Two Specialties

X-ray image of hip, with orthopedic implant
Image via Wikipedia

If you haven’t already heard the big news from last week, Johnson and Johnson’s Cordis subsidiary announced its withdrawal from the drug-eluting (DES) stent market, a momentous event for the firm that launched the first DES and created a new multi-billion-dollar medical device sector. Cordis is also shutting down its Conor MedSystems DES business, which it acquired for $1.4 billion in 2007. My reaction: Wow!

Meanwhile, the same week, the NY Times reported that metal-on-metal hip implants may become “the largest product liability cases of this decade.” ┬áThe FDA website states that “on May 6, 2011 the FDA issued orders for postmarket surveillance studies to manufacturers of metal-on-metal hip systems. The FDA sent 145 orders to 21 manufacturers.”

Two long-term implants. Two medical device sectors. One critical difference.

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Competition On Multiple Fronts

Juarez, fortification of adobes during battle ...
Image by The Library of Congress via Flickr

Most trade disputes between medical device companies involve intellectual property (IP). While the conflict between LightLab and Volcano is relatively small compared to others in the medical device industry (e.g. check out last year’s $1.7B battle between Boston Scientific and J&J), the lessons to be learned are large.

Briefly, Volcano is developing a competing product to LightLab’s OCT system, and accelerated their program by purchasing LightLab’s laser supplier Axsun. The dispute involves allegations of patent infringement, unauthorized disclosure of confidential information, and contract performance issues.

At the end of January, both LightLab and Volcano issued press releases claiming victory in the most recent rulings. Eric Swanson, LightLab co-founder and editor of Optical Coherence Tomography News, just posted an entertaining summary of the recent court documents. Despite these rulings, the legal skirmishes will continue, and the only safe prediction is that the lawyers will be the winners.

What are the lessons learned?

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