Each week, we seek expert advice to help a small or medium-sized business overcome a key issue.
Imagine someone is desperately sick with a respiratory disease, say severe acute respiratory syndrome (SARS), and he needs emergency care.
A medical professional would likely administer oxygen, strapping a clear plastic mask on the patient.
But this may not be safe because these masks typically don’t filter a patient’s exhaled breath. When the patient is given a continuous stream of oxygen, he could fan germs onto everything and everyone around him, said Steve Flynn, a respiratory therapist turned inventor and businessman.
Ten years ago, Mr. Flynn developed an exhaled-breath-filtering mask called the Flo2Max in response to the SARS scare in Toronto. Yet since then, his Oakville, Ont., company, BLS Systems Ltd., which has seven employees and annual revenue of about $2-million, has had a tough time persuading Canadian hospitals to use the more elaborate, more costly devices.
“Tradition dies hard in medicine,” Mr. Flynn said. While some new medical devices, such as an improved pacemaker, can grab headlines, everyday medical aids can be a tough sell – particularly in Canada, where bottom-line costs are often a determining factor.
The Flo2Max oxygen masks cost around $3.50 each, compared to $1 for ordinary masks, and have proven popular with paramedic operations in Ontario, Mr. Flynn said. But it has been an uphill fight trying to sell them to Canadian hospitals.
When BLS’s marketing director Ted Reesor describes the long slog in finding buyers, you can hear the frustration in his voice.
“For a long time, we spent an awful lot of resources in going way up the food chain to the national infection control agencies and saying, ‘Listen, can you consider this and put it in your procedures that get percolated down to the individual regions and organizations?’ And again, there’s the inertia,” he said.
Cheaper oxygen masks commonly have holes, for safety’s sake. If the oxygen supply runs out, the patient can still breathe room air. Those holes also allow some of the oxygen intended for the patient to escape. BLS’s mask has a valve that lets in room air in case of an emergency, Mr. Reesor said.
Flo2Max meets various international regulatory standards and has Health Canada approval, according to the company.
The problem is persuading end-users to appreciate the wider benefits of the masks, Mr. Reesor said. Infection-control people see this as more of an issue for respiratory therapists. Respiratory therapists see it more as an infectious-disease concern.
Meanwhile, hospitals are forever looking at the bottom line.
“One of the issues is that we have relationships with large distributors, and some of those large distributors also sell the non-filtered masks,” Mr. Reesor said. “So at the end of the day, they are going to sell what people buy. A large distributor selling masks which don’t filter and which do filter will sell the ones that are an easier sell.”
The challenge: How can BLS sell the medical world on a new device when the barriers seem insurmountable?
THE EXPERTS WEIGH IN
Nevan Hanumara, a researcher specializing in the business of medical devices, Massachusetts Institute of Technology, Cambridge, Mass.
One of the best paths is to “de-risk” your product fully and let one of the bigger firms acquire you. They already have foot traffic in the hospitals.
Big firms are set up to do incremental development. They are not set up really well to handle a brand new product. So when purchasing the rights to a small company’s product, they like a company that has taken its product to the point where it’s a turnkey solution.
Jacqueline Valmont, a business consultant for the medical technology industry, Toronto
Introducing a new medical device in Canada is very expensive for a small company for many reasons, from contracting practices and regulatory hurdles to the high cost of creating awareness for a product.
The bottom line is that it’s normal that it takes more time, more patience and more money to develop a market than a regular commercial product.
Brian Lewis, president and chief executive officer of Medec, a trade association representing Canadian medical technology companies, Toronto
What’s going to be really important is to communicate the medical value of their device.
Using data that’s already out there about infectious respiratory diseases, they can show the benefits. I don’t mean doing a clinical study on it, in which case you’re talking years. It’s about using the data already available in the marketplace to demonstrate the impact the product could have.
THREE THINGS THE COMPANY COULD DO NOW
Sell the rights
A bigger company could be enticed to purchase BLS outright for its innovations.
Realize it will take time
Medical devices aren’t consumer goods. Any company introducing them has to go through a long and costly introductory period.
Use all data available
The company should gather as much data as it can on infectious respiratory diseases to illustrate the possible benefits of its product.
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Interviews have been edited and condensed.Report Typo/Error