As part of the MedTech conference, MedTech Color hosted its 6th Annual networking breakfast, bringing together professionals of color and allies in the medical technology space. Tania Saison of Edwards Lifesciences was the keynote speaker at the MedTech Color networking breakfast, delivering a powerful speech on her path to her current leadership role and the hurdles that she faced as a diverse person and lawyer, many of which resonated with us as diverse lawyers. Additionally, Ms. Saison remarked on the ways in which culture is essential to a company’s growth, a consideration that applies to the medical technology industry and beyond. Ms. Saison discussed the necessity and positive influence of compliance roles, particularly at global medical device companies where ensuring compliance among multiple regulatory schemes is important.
Among other things, the conference highlighted intentional investments in diverse entrepreneurs and technologies that accounted for the specific health needs of diverse and underserved populations. Many of these entrepreneurs and technologies could identify direct links between diversity considerations and improvements in patient clinical outcomes. For example, a panelist developing AI technologies remarked that ensuring the underlying algorithm thoroughly accounts for clinical differences in the presentation of disease between different racial and ethnic populations improves the diagnostic value across patients and results in more accurate care. Below is a summary of additional key takeaways from the MedTech conference.
Increasing investment in women’s health, research, and medical technology
Industry leaders representing manufacturers, investors, and nonprofit foundation coordinators convened at MedTech to discuss the latest trends in the space of women’s health and research. As background, the panelists noted that investment into women’s health has historically been low, which has discouraged new entry into the space. However, panelists at the conference discussed that recent trends demonstrate that despite challenges, women’s health is a growing space for research and investment.
Insufficient data, often due to either a failure to collect new data or utilize existing public health data, obstructs visibility into the most prevalent health issues facing women and transparency on the best treatment options. Furthermore, many health issues that disproportionately impact women are not captured by intake forms as currently designed, are stigmatized, and thus not discussed by clinicians, or are ignored due to a lack of education about their presentation or prevalence. In response to this challenge, a panelist speaking on behalf of a leading women’s health company described how the company’s Global Women’s Health Index seeks to collect annual data about the health and wellness of women internationally. Datapoints such as the frequency of cancer screening and visits to a primary care provider aid industry and public health officials in identifying critical women’s health issues that require attention.
Furthermore, panelists discussed challenges that manufacturers face due to treatments for women’s health medical conditions that manifest with tangible symptoms frequently being categorized as “wellness-related” rather than “medical.” The panelists noted that this arises in the women’s health space more so than in any other clinical area, and has disproportionate downstream impacts on patients and providers, including in achieving coverage and reimbursement for such products. Nonetheless, for innovators in this space, these challenges provide an opportunity for advocacy to expand the availability of necessary diagnostics and therapeutics for advancing women’s health.
Finally, the panelists discussed the vast patient population that stands to benefit from greater research, investment, and development into women’s health. While women’s health has been traditionally conceived of as limited to reproductive health, the panelists emphasized that researchers and investors should consider women’s health to encompass any medical condition that impacts or manifests in women differently than in men. When viewed through this lens, the opportunity for research, investment, and innovation in women’s health is both massive and untapped.
Trends in antitrust and medical technology
At the MedTech M&A Chief Executive Officer (CEO) Talk, Pete Cataldo, Rachel Ellingson, Geoff Martha, and Deepak Nath discussed recent M&A trends, noting that the number of medical technology transactions has decreased in 2023 compared to preceding years, which the panelists attributed to uncertainty in the markets, higher interest rates, and the rising costs of transactions. However, each of the panelists was confident that this trend is temporary, noting that M&A is key to value creation in medical technology, and without acquisitions, innovation and growth in the sector will be limited. In 2024, the panelists predicted that we are likely to see more strategic transactions and venture capital activity. While some companies may consider fewer deals in the future, they expect those deals to provide more short-term impact.
As transactions pick up again in the medical technology space, there is a question about what regulatory challenges companies will face. During the Antitrust Development and Enforcement Trends session, panelists Jamie France, Jen Dibble, and Mika Ikeda discussed the potential implications of the 2023 Draft Merger Guidelines released by the Federal Trade Commission (FTC) and Department of Justice (DOJ) (collectively, “the agencies”), new proposed changes to the premerger notification rules, and recent cases the agencies have brought in this space:
In June 2023, the FTC and DOJ proposed significant changes to the premerger notification filing requirements under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR Act). If finalized, merging parties that meet the threshold tests will have to submit more information than is currently required, including narrative responses regarding the rationale of the transaction and competition analyses, a broader set of transaction-related documents, data classifying employees based on Standard Occupational Classification system categories, and North American Industry Classification System (NAICS) Codes for pipeline products. The agencies estimate that it will take approximately four times as long to prepare a filing under the proposed rule. The panelists warned the industry to plan for additional preparation time, cost, and effort when thinking about M&A.
The panelists characterized the Draft Merger Guidelines published by the agencies last summer as a move away from the structural approach to merger review that has been in place since 2010. The 13 draft guidelines provide new theories of merger enforcement that would lower threshold for what is considered a “highly concentrated market,” scrutinize the impact on labor markets, and evaluate trends towards concentration. One panelist remarked that the draft guidelines are “one of the things that keeps [her] up at night.”
Citing to the Meta/Within deal — which the FTC challenged in part on a theory of impact to potential competition — the panelists noted that the FTC might look deeper into the merging parties’ pipelines when evaluating the competitive effects of a transaction. While the FTC was unsuccessful in its challenge of Meta/Within, the Draft Merger Guidelines indicate that the impact of a transaction on potential competition — whether actual or perceived — is a theory that the agencies will continue to pursue in their merger enforcement efforts.
Echoing the sentiments in the CEO Talk, the panelists noted that M&A is a significant driver of medical technology innovation as many companies look to transactions to provide the resources and support that they need to continue research and development and to take a product to market. If the industry is not prepared, these regulatory changes have the potential to significantly impact innovation in the industry.
Beyond M&A, the panelists also encouraged the industry to be aware of the agencies’ increased focus on labor markets. Even where companies do not compete with respect to the same products or services, they could compete for labor, such as engineers. As a result, medical technology companies that might not be considered typical competitors should nonetheless be careful about the information they share at roundtables, consortiums, and other gatherings with respect to compensation, benefits, and other labor-related considerations.
Intersection of AI and diagnostics in medical technology
As the use of AI continues to evolve in the medical technology sector, US Food and Drug Administration (FDA) regulatory frameworks under which such products are reviewed remain complex and product specific. Advanced AI algorithms and machine learning (ML) techniques are increasingly being leveraged in the general diagnostic radiology space, for example through use of computer-aided detection (CAD) systems and predictive analytics. This provides some certainty as to how these products are classified and evaluated by FDA. Industry leaders also recognize the high value in optimizing patient care through AI at the intersection of other specialties and product areas, including in emerging in vitro diagnostics, oncology, cardiology, gastroenterology, and neurology. However, uncertainty in product regulation has traditionally prevented companies from expending resources on research and development efforts in these areas.
Panelists at the Exploring Trends and Opportunities Where AI and Diagnostics Intersect roundtable discussed having observed a noticeable shift in companies having the impetus to explore and develop more tailored AI applications across specialties. For example, high breast density is a risk factor for cancer, and due to the fibrous and glandular nature of tissue type it can mask detection of underlying small tumors or abnormalities on mammograms as assessed by the human eye. AI algorithms, with appropriate ground truthing by radiation oncologists or other qualified healthcare providers, can assist in the accurate and precise detection of breast abnormalities, including masked tumors. One panelist highlighted AI-guided ultrasound and MRI serves as a means to identify suspicious lesions that may otherwise be overlooked on standard mammography. Moreover, the use of AI with other clinical or genetic data can improve diagnostic accuracy and prognostic outcomes, providing a more individualized treatment solution for patients.
Nevertheless, there are several challenges that remain to be addressed as the use of AI in medical technology evolves. For example, panelists noted a growing interest in using autonomous AI, i.e., without independent physician ground truthing, but FDA (and other relevant regulatory agencies, such as the FTC) have not always openly discussed their stance on autonomous AI technologies. FDA has cleared certain autonomous AI products for aiding in the detection of diabetic retinopathy. However, FDA appears much more reluctant to comment on the use of solely autonomous AI as used in interpreting mammograms. This may, at least in part, be due to concerns about a faulty read of the image (e.g., detecting a breast mass where none exists, or the converse) having important implications from a patient, provider, and products liability perspective. Further, uncertainty regarding coverage and reimbursement can cause companies to be risk averse in being first in the industry to bring these products to market.
On balance, both the panelists and the audience during the question and answer (Q&A) session were exceedingly optimistic regarding the integration of AI-enabled and driven medical devices. The potential of this technology to significantly improve healthcare outcomes, enhance efficiency, and provide more personalized treatment options, is a significant motivating factor in tackling any challenges associated with their development and use.
Trends in women’s health, antitrust, and AI continue to evolve in the medical technology industry, providing ample opportunities for growth, investment, and innovation in emerging technologies. Recognizing and prioritizing gender-specific health needs and offering more inclusive and individualized care options are vital to improving health outcomes for women. Further, as deals gain momentum in 2023, understanding and strategically navigating antitrust enforcement trends and regulatory changes are crucial in driving innovation through fair competition. As medical technology-focused AI and machine learning tools continue to develop rapidly, staying abreast of the latest trends across medical specialties is essential to advancing quality and efficiency of healthcare delivery in a lucrative market.
Our global team of Life Sciences and Health Care lawyers routinely advise companies on complex issues spanning across a product’s total lifecycle — from a product’s inception, tackling regulatory hurdles during research and development, and achieving pre-market authorization, to addressing post-market compliance, enforcement, and reimbursement matters. Before and after commercialization, we regularly provide strategic counsel on diligence, acquisition, and positioning products on the market for long-term success. We can leverage these insights to help clients anticipate challenges and be well-equipped to manage them as they arise.
Authored by Jodi K. Scott, Beth Roberts, Lauren Battaglia, Sanchita Bose, Ashley Ifeadike, and Rianna Modi