Got an idea for a product? You don’t have to go it alone. Many ophthalmologists will partner with industry at some point in their career, in one form another. For instance, industry commonly seeks out opinions from surgeons on its products and might look to them for advice on how to design studies to gain FDA approval, or how to message a device to the community of users. “That’s what more than 90% of doctor-industry partnerships really look like,” says John P. Berdahl, MD. But there are other scenarios sure to intrigue would-be innovators.
But say “the doctor has an idea — but not the horsepower — to turn that idea into a tangible product,” says Dr. Berdahl. “Now, that is more fun; the concept is truly the doctor’s baby.”
If that’s the case, the doctor has two alternatives: partner with industry to bring that product to development, or go the entrepreneur route and start a company to develop products. In this article, we will look at what you need to know when you decide to use someone else’s horsepower for a fruitful and fair partnership with industry. (For the entrepreneurial route, see page 30.) Even when you have industry’s help along the way, you will find a lot to consider and myriad challenges to overcome in the arduous trek from a great idea to a successful commercialized product.
ADVICE BEFORE YOU APPROACH
Due diligence and feasibility
Many of the criteria would-be inventors must face are the same as those for would-be entrepreneurs: having an idea that just won’t leave you alone, developing a clear proof of concept and performing due diligence. Before approaching industry or even applying for intellectual property, “my number one recommendation to colleagues who tell me they have a great idea is do more due diligence,” says Steve T. Charles, MD.
Dr. Charles, like all the surgeon-innovators/inventors interviewed, is often asked for advice about product ideas. “Unfortunately, I have found that often doctors have ideas that they believe to be novel when they really are not, or they believe the imagined product to be worth much more than would be realistic.” This means researching the idea thoroughly to make sure it doesn’t already exist. “Get on Google, think of all the different ways to search for the idea, look up possible names for the product, maybe even use other languages,” he adds. Dr. Charles is on the board of a nonprofit medical device seed capital firm in Memphis that helps “take innovations to the finish line.” While there, he has seen his share of bad business plans. “The surgeon needs to be prepared with real estimates of the product’s financial potential. This means understanding the market size, the cost of goods and the average sales price. Be realistic about the economics.”
Dr. Berdahl agrees. “Doctors are often unsophisticated when it comes to knowing the real market potential of a product. If the product meets an unmet need for seven people in the country — that is not a business. There must be a meaningful market.”
Happily, ophthalmology enjoys a good ecosystem for product innovation, Dr. Berdahl notes, and it spans from small companies that are looking for niche items to enormous companies seeking only big market opportunities.
Sean Ianchulev, MD, MPH, points out the advantage of establishing a feasibility read on the device or invention. “When I was working on intraoperative aberrometry, for example, I found a way to adapt another device for intraoperative use to validate the concept.” If the surgeon has some proof that the idea works, even if by proxy, the discussion with industry will be more meaningful.
Applying for intellectual property (IP) — i.e., patents — is the first step to having any meaningful conversation about a viable product. The surgeon-innovator should have this process underway before starting real conversations about the idea. “This step is hard, but it’s really the litmus test of how committed the inventor is to the product or idea,” Dr. Berdahl says. “To apply for a patent in a professional way costs about $20,000. This protects the idea and shows commitment — it’s a good gut check.”
Start a conversation
Dr. Berdahl finds talking to trusted colleagues to be very valuable when he’s percolating ideas. The interaction gets him excited and keeps him interested. “Ideally, this should be done under a nondisclosure agreement [NDA]” he notes. “By discussing the idea with others, the surgeon can learn if they see the idea fitting into the current marketplace.”
Talk to people you trust, Dr. Berdahl emphasizes, not just those colleagues who will tell you what you want to hear. The surgeon-inventor needs to find out from others if the idea is “big enough to invest in and big enough to matter,” says Richard L. Lindstrom, MD.
Once the surgeon is convinced that he or she has a product that fills a need and has applied for IP, then it is time to approach industry for a meeting. Beware, however, of the well-intentioned bad advice, says Dr. Ianchulev — people mean well, but they may not really have expertise. “I have been involved in technologies where the first response of my friends and colleagues was, ‘why would someone need that?’” he says. “Sometimes, if a need is not palpable to others, they won’t be able to see what the innovator sees. Everyone has their own bias point and might not be able to project into the future.”
Take the critique, but leave the criticism behind, Dr. Ianchulev advises. “Pressure test the idea and always trust your gut and your passion.”
FIND AN INDUSTRY MATCH
That first meeting
Ideally, discussions with industry are also under NDAs. “Keep in mind that companies may have many projects going on at once and some may overlap with the innovator’s idea,” Dr. Berdahl explains. “NDAs should be specific to what the surgeon is going to show the company and be something that the company does not already know. Under those conditions, the inventor can discuss the idea freely.”
As for getting a meeting with a company, Dr. Lindstrom notes that it helps to have a connection to the company or someone to make the introduction. Perhaps a local sales rep can help set something up. “If the surgeon gets an appointment, the company might give him or her 30 or 60 minutes to make the pitch in a face-to-face meeting,” Dr. Lindstrom says.
To form a partnership agreement with industry, a surgeon must recognize this is truly a partnership. “This is no longer the surgeon’s idea only; it’s the surgeon’s idea and the goals of the partner — the surgeon won’t always get his or her way,” Dr. Berdahl says. “But, at the same time, no one is ever going to care more about the product than the inventor, and he or she is key to setting the vision.”
Think of it like a marriage, he says. During the process of working with industry through the development stages of the product, Dr. Berdahl advises doctors to recognize their strengths and the industry partner’s strengths. “Recognize that as the inventor, you can’t be all things to all people,” he says.
Dr. Charles agrees. “Surgeons must acknowledge the matters in which they are not an expert,” he says.
Once the partner agrees
If the company is enthusiastic about the product, Dr. Lindstrom says it is likely it will offer a small amount of cash to cover the costs to date. “The company agrees to pursue the idea, bearing the expenses and pay the inventor-surgeon a royalty,” he says. Dr. Lindstrom has done this successfully more than once, noting that the upfront payment is typically modest.
“There can be several years spent working side-by-side with the company to take the product through the regulatory process into commercialization,” Dr. Lindstrom adds. “Once the product is commercialized, often the inventor has a role in educating others on how to use the device. After full successful commercialization, the inventor can achieve royalty, which would usually be for the duration of the patent.” Dr. Lindstrom gave a nod to Charles Kelman, MD, PhD, the man with over 100 patents and inventor of IOLs and phacoemulsification.
An easy path to an industry partnership
A simple way for a surgeon-innovator to partner with industry is to help to bring to market a device or drug that has value — and choosing not to personally profit from sales.
Dr. Lindstrom says it is relatively easy and straightforward to take an appropriate idea to a strategic company, showing that there is an unmet need for which you believe there is an opportunity. The surgeon would present the idea to an interested company and encourage the principals to pursue the opportunity. He or she would agree to be helpful along the way. Such an arrangement may generate consulting fees, but there would be no contractual agreement with related compensation.
This type of scenario most frequently happens with surgical instruments. Do you need a specific tool for a certain aspect of a procedure, or step of your cataract routine? Maybe, if this instrument existed, a bunch of your colleagues would use it too. After all, everyone has a Sinskey hook. Dr. Lindstrom points out that many surgeons collaborate with instrument makers in this way. Although not necessarily a way to make a large profit, the surgeon can certainly gain in reputation by having this partnership with industry.
Do any of these tools sound familiar? They were made under such agreements between industry and surgeon-innovators:
- Castroviejo CVD
- Utrata forceps
- Tennant tying forceps
- Sinskey hook
- Kelman-McPherson tying forceps
- Lieberman wire speculum
- Vannas scissors
- Ernest nucleus cracker
- Koch stop and chop manipulator
- Kuglen iris hook and lens manipulator
- Jaffe iris hook
- Thornton fixation ring
- Lindstrom spatula
Before you sign
How does the surgeon-inventor decide on the right agreement with industry? Find a mentor, and talk to someone who has negotiated this before. “Because companies do this all the time and the surgeon might do this once, advice is required to avoid potholes,” Dr. Berdahl says. “Industry is not out to take advantage of the inventor, but they do have different goals.” It might also be difficult for the surgeon to identify exactly what type of arrangement is most beneficial (i.e., a partnership with a royalty agreement or a purchase with milestones; there are dozens of considerations). Consult an expert, he urges.
“The book ‘Venture Deals’ by Brad Feld helped me, as a doctor, see the perspective of the other side, be it a venture capital company or a strategic one,” Dr. Berdahl says.
WHAT DOES IT TAKE TO BE AN INNOVATOR?
Immerse yourself, advises Dr. Charles. “If this is really your passion, you need to be committed.” His bookshelf noticeably lacks novels, he says. “I read about engineering and science. I am constantly studying and learning. That is how one becomes a true innovator. It really is not something you set out to do part of the time.”
Innovators “immerse themselves in the problem set,” Dr. Charles says. “One must be enmeshed in clinical care to understand the unmet need.”
One who is considering the innovator-inventor path should do some soul searching, count the hours in the day and talk to family. “Medicine itself is beyond a full-time job. Surgeons must know that if they want to take an idea forward, it requires real work and dedication,” Dr. Ianchulev says.
“I counsel people that it takes a lot of time and it is far from easy,” adds Dr. Lindstrom. “Of all the ideas, only a few become products and even fewer than that make it to clinical trials, then one in eight to 10 reach commercialization.” The odds are formidable, certainly.
“The other side of the story, though, is that it’s the ophthalmologists who are in the trenches dealing with patients every day,” Dr. Lindstrom says.
“We are the ones who observe unmet needs and lack the right solution when we are treating patients. This is truly where innovation is born.” OM