1. Operating in the US Market
Key Considerations for Device &
Diagnostics Companies
David Avitabile
President
JFK Communications, Inc.

2. Good News
 The growth of Personalized Medicine
– Total market expected to rise $119-$220 billion in a 16 year
span
 U.S. Medical Device Market is still # 1
– An estimated $94.9 billion will be made in 2010
– California being the lead state for medical device manufacturing
& development
– Johnson & Johnson highest earnings overall in 2009, $23.6
billion
 Medical Device innovation in U.S. accredited for
– 15% decline in annual mortality
– 25% decline in disability rates
– 3.2 year increase in life expectancies
– 56% decrease of the amount of days spent in hospitals
Sources: 1. PricewaterhouseCoopers 2009; 2. Marketresearch.com; 3. Advamed.org Testimony on U.S.
Medical Technology Industry

3. Personalized Medicine Market
Projections
Sources: 1. PricewaterhouseCoopers 2009; 2. Pascal Yvon, President BioSciences
Expansion, Committee Co-Chair

4. Top U.S. Medical Device
Manufacturers
Source: Medical Products Outsourcing, Top 10 Medical Device Companies

5. 510 (k) Regulatory Pathway
 FDA Center for Devices and Radiological
Health (CDRH) 510 (k) process: the pathway
for approval in the US
 Recent proposed changes raise concerns
from medical device and diagnostics
companies
 If you don’t have an approved product in the
US, you don’t have a business in the US

6. Medical Device Innovations
Contributions
 AdvaMed Tesitmony on U.S. Medical Technology Industry:
“The contribution of the life sciences to our economy goes beyond
conventional measures of employment, wages, and exports. By
improving the health of the population, progress in the life sciences
is an engine driving productivity and labor force participation, both
significant contributors to economic growth and GDP. Between
1980 and 2000, medical progress added more than three years to
life expectancy. The death rate from heart disease was cut in half;
the death rate from stroke was cut by one-third, and the death rate
from breast cancer was cut 20%”
Source: Advamed.org, Testimony on U.S. Medical Technology Industry

7. Bad News
 FDA 510(k) Process changes may cause issues in:
– Pre-Approval timelines
– Costs in conducting clinical trials
– May cause clinical trials and medical devices to go overseas in
order to become more cost-effective
 New Health Care Reform could prove costly to Industry
– The 2.3 % tax on medical devices companies
 U.S. could lose lead position in Medical Device manufacturing
– Increase tax and regulations could cause companies to prioritize
overseas markets over US
Sources: 1. AdvaMed Press Release- Comments in Response on FDA’s Proposed 510(k) Changes;
2. Medicaldevices.org; 3. Advamed.org, Testimony on U.S. Medical Technology Industry

8. Effects of Proposed 501(k) Changes
Source: AdvaMed Press Release- Comments in Response on FDA’s Proposed 510(k) Changes

9. Heath Care Reform Effects
 Scheduled 2013, 2.3 % tax on medical device
companies
 Totals approximately $20 billion over a 10 year span
– Lay offs
– Mid-sized companies could owe more in taxes than their
annual profits
– Closing of mid-sized medical device companies
– Delay development of new devices
– Cause significant budget cuts to companies
Source: Associated Pres , September 2010

10. Pathway for EU Companies Entering
the US Market
 Identify partners with experience
supporting US market entry
– Life sciences private equity/VCs
– Tax advisors to life science companies
– Legal counsel
– Regulatory affairs
– Marketing & communications
– National / state Bio associations
– Life sciences incubators

11. Life Sciences Associations